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116th Congress }                                          { Rept. 116-159
                        HOUSE OF REPRESENTATIVES
 1st Session   }                                          { Part 2

======================================================================
 
        REHABILITATION FOR MULTIEMPLOYER PENSIONS ACT OF 2019

                                _______
                                

 July 19, 2019.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

   Mr. Scott of Virginia, from the Committee on Education and Labor, 
                        submitted the following

                              R E P O R T

                             together with

                             MINORITY VIEWS

                        [To accompany H.R. 397]

    The Committee on Education and Labor, to whom was referred 
the bill (H.R. 397) to amend the Internal Revenue Code of 1986 
to create a Pension Rehabilitation Trust Fund, to establish a 
Pension Rehabilitation Administration within the Department of 
the Treasury to make loans to multiemployer defined benefit 
plans, and for other purposes, having considered the same, 
report favorably thereon with an amendment and recommend that 
the bill as amended do pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................    11
Committee Action.................................................    12
Committee Views..................................................    15
Section-by-Section Analysis......................................    20
Explanation of Amendments........................................    26
Application of Law to the Legislative Branch.....................    26
Unfunded Mandate Statement.......................................    26
Earmark Statement................................................    27
Roll Call Votes..................................................    27
Statement of Performance Goals and Objectives....................    32
Duplication of Federal Programs..................................    32
Hearings.........................................................    32
Statement of Oversight Findings and Recommendations of the 
  Committee......................................................    32
New Budget Authority and CBO Cost Estimate.......................    32
Committee Cost Estimate..........................................    33
Changes in Existing Law Made by the Bill, as Reported............    33
Minority Views...................................................   121

    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Rehabilitation for Multiemployer 
Pensions Act of 2019''.

SEC. 2. PENSION REHABILITATION ADMINISTRATION; ESTABLISHMENT; POWERS.

  (a) Establishment.--There is established in the Department of the 
Treasury an agency to be known as the ``Pension Rehabilitation 
Administration''.
  (b) Director.--
          (1) Establishment of position.--There shall be at the head of 
        the Pension Rehabilitation Administration a Director, who shall 
        be appointed by the President.
          (2) Term.--
                  (A) In general.--The term of office of the Director 
                shall be 5 years.
                  (B) Service until appointment of successor.--An 
                individual serving as Director at the expiration of a 
                term may continue to serve until a successor is 
                appointed.
          (3) Powers.--
                  (A) Appointment of deputy directors, officers, and 
                employees.--The Director may appoint Deputy Directors, 
                officers, and employees, including attorneys, in 
                accordance with chapter 51 and subchapter III of 
                chapter 53 of title 5, United States Code.
                  (B) Contracting.--
                          (i) In general.--The Director may contract 
                        for financial and administrative services 
                        (including those related to budget and 
                        accounting, financial reporting, personnel, and 
                        procurement) with the General Services 
                        Administration, or such other Federal agency as 
                        the Director determines appropriate, for which 
                        payment shall be made in advance, or by 
                        reimbursement, from funds of the Pension 
                        Rehabilitation Administration in such amounts 
                        as may be agreed upon by the Director and the 
                        head of the Federal agency providing the 
                        services.
                          (ii) Subject to appropriations.--Contract 
                        authority under clause (i) shall be effective 
                        for any fiscal year only to the extent that 
                        appropriations are available for that purpose.
  (c) Transfer of Funds.--The Secretary of the Treasury may transfer 
for any fiscal year, from unobligated amounts appropriated to the 
Department of the Treasury, to the Pension Rehabilitation 
Administration such sums as may be reasonably necessary for the 
administrative and operating expenses of the Pension Rehabilitation 
Administration.

SEC. 3. PENSION REHABILITATION TRUST FUND.

  (a) In General.--Subchapter A of chapter 98 of the Internal Revenue 
Code of 1986 is amended by adding at the end the following new section:

``SEC. 9512. PENSION REHABILITATION TRUST FUND.

  ``(a) Creation of Trust Fund.--There is established in the Treasury 
of the United States a trust fund to be known as the `Pension 
Rehabilitation Trust Fund' (hereafter in this section referred to as 
the `Fund'), consisting of such amounts as may be appropriated or 
credited to the Fund as provided in this section and section 9602(b).
  ``(b) Transfers to Fund.--
          ``(1) Amounts attributable to treasury bonds.--There shall be 
        credited to the Fund the amounts transferred under section 6 of 
        the Rehabilitation for Multiemployer Pensions Act of 2019.
          ``(2) Loan interest and principal.--
                  ``(A) In general.--The Director of the Pension 
                Rehabilitation Administration established under section 
                2 of the Rehabilitation for Multiemployer Pensions Act 
                of 2019 shall deposit in the Fund any amounts received 
                from a plan as payment of interest or principal on a 
                loan under section 4 of such Act.
                  ``(B) Interest.--For purposes of subparagraph (A), 
                the term `interest' includes points and other similar 
                amounts.
          ``(3) Transfers from secretary.--The Director of the Pension 
        Rehabilitation Administration shall deposit in the Fund any 
        amounts received from the Secretary under section 2(c) of such 
        Act.
          ``(4) Availability of funds.--Amounts credited to or 
        deposited in the Fund shall remain available until expended.
  ``(c) Expenditures From Fund.--Amounts in the Fund are available 
without further appropriation to the Pension Rehabilitation 
Administration--
          ``(1) for the purpose of making the loans described in 
        section 4 of the Rehabilitation for Multiemployer Pensions Act 
        of 2019,
          ``(2) for the payment of principal and interest on 
        obligations issued under section 6 of such Act, and
          ``(3) for administrative and operating expenses of such 
        Administration.''.
  (b) Clerical Amendment.--The table of sections for subchapter A of 
chapter 98 of the Internal Revenue Code of 1986 is amended by adding at 
the end the following new item:

``Sec. 9512. Pension Rehabilitation Trust Fund.''.

SEC. 4. LOAN PROGRAM FOR MULTIEMPLOYER DEFINED BENEFIT PLANS.

  (a) Loan Authority.--
          (1) In general.--The Pension Rehabilitation Administration 
        established under section 2 is authorized--
                  (A) to make loans to multiemployer plans (as defined 
                in section 414(f) of the Internal Revenue Code of 1986) 
                which are defined benefit plans (as defined in section 
                414(j) of such Code) and which--
                          (i) are in critical and declining status 
                        (within the meaning of section 432(b)(6) of 
                        such Code and section 305(b)(6) of such Act) as 
                        of the date of the enactment of this Act, or 
                        with respect to which a suspension of benefits 
                        has been approved under section 432(e)(9) of 
                        such Code and section 305(e)(9) of such Act as 
                        of such date;
                          (ii) as of such date of enactment, are in 
                        critical status (within the meaning of section 
                        432(b)(2) of such Code and section 305(b)(2) of 
                        such Act), have a funded percentage of less 
                        than 40 percent (as determined for purposes of 
                        section 432 of such Code and section 305 of 
                        such Act), and have a ratio of active to 
                        inactive participants which is less than 2 to 
                        3; or
                          (iii) are insolvent for purposes of section 
                        418E of such Code as of such date of enactment, 
                        if they became insolvent after December 16, 
                        2014, and have not been terminated; and
                  (B) subject to subsection (b), to establish 
                appropriate terms for such loans.
          (2) Consultation.--The Director of the Pension Rehabilitation 
        Administration shall consult with the Secretary of the 
        Treasury, the Secretary of Labor, and the Director of the 
        Pension Benefit Guaranty Corporation before making any loan 
        under paragraph (1), and shall share with such persons the 
        application and plan information with respect to each such 
        loan.
          (3) Establishment of loan program.--
                  (A) In general.--A program to make the loans 
                authorized under this section shall be established not 
                later than September 30, 2019, with guidance regarding 
                such program to be promulgated by the Director of the 
                Pension Rehabilitation Administration, in consultation 
                with the Pension Benefit Guaranty Corporation and the 
                Department of Labor, not later than December 31, 2019.
                  (B) Loans authorized before program date.--Without 
                regard to whether the program under subparagraph (A) 
                has been established, a plan may apply for a loan under 
                this section before either date described in such 
                subparagraph, and the Pension Rehabilitation 
                Administration shall approve the application and make 
                the loan before establishment of the program if 
                necessary to avoid any suspension of the accrued 
                benefits of participants.
  (b) Loan Terms.--
          (1) In general.--The terms of any loan made under subsection 
        (a) shall state that--
                  (A) the plan shall make payments of interest on the 
                loan for a period of 29 years beginning on the date of 
                the loan (or 19 years in the case of a plan making the 
                election under subsection (c)(5));
                  (B) final payment of interest and principal shall be 
                due in the 30th year after the date of the loan (except 
                as provided in an election under subsection (c)(5)); 
                and
                  (C) as a condition of the loan, the plan sponsor 
                stipulates that--
                          (i) except as provided in clause (ii), the 
                        plan will not increase benefits, allow any 
                        employer participating in the plan to reduce 
                        its contributions, or accept any collective 
                        bargaining agreement which provides for reduced 
                        contribution rates, during the 30-year period 
                        described in subparagraphs (A) and (B);
                          (ii) in the case of a plan with respect to 
                        which a suspension of benefits has been 
                        approved under section 432(e)(9) of the 
                        Internal Revenue Code of 1986 and section 
                        305(e)(9) of the Employee Retirement Income 
                        Security Act of 1974, or under section 418E of 
                        such Code, before the loan, the plan will 
                        reinstate the suspended benefits (or will not 
                        carry out any suspension which has been 
                        approved but not yet implemented);
                          (iii) the plan sponsor will comply with the 
                        requirements of section 6059A of the Internal 
                        Revenue Code of 1986;
                          (iv) the plan will continue to pay all 
                        premiums due under section 4007 of the Employee 
                        Retirement Income Security Act of 1974; and
                          (v) the plan and plan administrator will meet 
                        such other requirements as the Director of the 
                        Pension Rehabilitation Administration provides 
                        in the loan terms.
                The terms of the loan shall not make reference to 
                whether the plan is receiving financial assistance 
                under section 4261(d) of the Employee Retirement Income 
                Security Act of 1974 (29 U.S.C. 1431(d)) or to any 
                adjustment of the loan amount under subsection 
                (d)(2)(A)(ii).
          (2) Interest rate.--Except as provided in the second sentence 
        of this paragraph and subsection (c)(5), loans made under 
        subsection (a) shall have as low an interest rate as is 
        feasible. Such rate shall be determined by the Pension 
        Rehabilitation Administration and shall--
                  (A) not be lower than the rate of interest on 30-year 
                Treasury securities on the first day of the calendar 
                year in which the loan is issued, and
                  (B) not exceed the greater of--
                          (i) a rate .2 percent higher than such rate 
                        of interest on such date, or
                          (ii) the rate necessary to collect revenues 
                        sufficient to administer the program under this 
                        section.
  (c) Loan Application.--
          (1) In general.--In applying for a loan under subsection (a), 
        the plan sponsor shall--
                  (A) demonstrate that, except as provided in 
                subparagraph (C)--
                          (i) the loan will enable the plan to avoid 
                        insolvency for at least the 30-year period 
                        described in subparagraphs (A) and (B) of 
                        subsection (b)(1) or, in the case of a plan 
                        which is already insolvent, to emerge from 
                        insolvency within and avoid insolvency for the 
                        remainder of such period; and
                          (ii) the plan is reasonably expected to be 
                        able to pay benefits and the interest on the 
                        loan during such period and to accumulate 
                        sufficient funds to repay the principal when 
                        due;
                  (B) provide the plan's most recently filed Form 5500 
                as of the date of application and any other information 
                necessary to determine the loan amount under subsection 
                (d);
                  (C) stipulate whether the plan is also applying for 
                financial assistance under section 4261(d) of the 
                Employee Retirement Income Security Act of 1974 (29 
                U.S.C. 1431(d)) in combination with the loan to enable 
                the plan to avoid insolvency and to pay benefits, or is 
                already receiving such financial assistance as a result 
                of a previous application;
                  (D) state in what manner the loan proceeds will be 
                invested pursuant to subsection (d), the person from 
                whom any annuity contracts under such subsection will 
                be purchased, and the person who will be the investment 
                manager for any portfolio implemented under such 
                subsection; and
                  (E) include such other information and certifications 
                as the Director of the Pension Rehabilitation 
                Administration shall require.
          (2) Standard for accepting actuarial and plan sponsor 
        determinations and demonstrations in the application.--In 
        evaluating the plan sponsor's application, the Director of the 
        Pension Rehabilitation Administration shall accept the 
        determinations and demonstrations in the application unless the 
        Director, in consultation with the Director of the Pension 
        Benefit Guaranty Corporation and the Secretary of Labor, 
        concludes that the determinations and demonstrations in the 
        application are unreasonable or are inconsistent with any rules 
        issued by the Director pursuant to subsection (g).
          (3) Required actions; deemed approval.--The Director of the 
        Pension Rehabilitation Administration shall approve or deny any 
        application under this subsection within 90 days after the 
        submission of such application. An application shall be deemed 
        approved unless, within such 90 days, the Director notifies the 
        plan sponsor of the denial of such application and the reasons 
        for such denial. Any approval or denial of an application by 
        the Director of the Pension Rehabilitation Administration shall 
        be treated as a final agency action for purposes of section 704 
        of title 5, United States Code. The Pension Rehabilitation 
        Administration shall make the loan pursuant to any application 
        promptly after the approval of such application.
          (4) Certain plans required to apply.--The plan sponsor of any 
        plan with respect to which a suspension of benefits has been 
        approved under section 432(e)(9) of the Internal Revenue Code 
        of 1986 and section 305(e)(9) of the Employee Retirement Income 
        Security Act of 1974 or under section 418E of such Code, before 
        the date of the enactment of this Act shall apply for a loan 
        under this section. The Director of the Pension Rehabilitation 
        Administration shall provide for such plan sponsors to use the 
        simplified application under subsection (d)(2)(B).
          (5) Incentive for early repayment.--The plan sponsor may 
        elect at the time of the application to repay the loan 
        principal, along with the remaining interest, over the 10-year 
        period beginning with the 21st year after the date of the loan. 
        In the case of a plan making this election, the interest on the 
        loan shall be reduced by 0.5 percent.
  (d) Loan Amount and Use.--
          (1) Amount of loan.--
                  (A) In general.--Except as provided in subparagraphs 
                (B) and (C) and paragraph (2), the amount of any loan 
                under subsection (a) shall be, as demonstrated by the 
                plan sponsor on the application under subsection (c), 
                the amount needed to purchase annuity contracts or to 
                implement a portfolio described in paragraph (3)(C) (or 
                a combination of the two) sufficient to provide 
                benefits of participants and beneficiaries of the plan 
                in pay status, and terminated vested benefits, at the 
                time the loan is made.
                  (B) Limitation based on ability to repay.--If at the 
                time of the application under subsection (c) the plan 
                sponsor determines that, based on a repayment schedule 
                that would provide for repayment of the full amount 
                determined under subparagraph (A) or (C)(ii) within the 
                30 year period described in subsection (b)(1), making 
                payments would cause the plan to be within 18 months of 
                becoming insolvent at any point during such period, the 
                loan amount shall be such lesser amount as the plan 
                sponsor determines the plan will be able to repay 
                without becoming within 18 months of insolvency.
                  (C) Plans with suspended benefits.--In the case of a 
                plan with respect to which a suspended benefits has 
                been approved under section 432(e)(9) of the Internal 
                Revenue Code of 1986 and section 305(e)(9) of the 
                Employee Retirement Income Security Act of 1974 (29 
                U.S.C. 1085(e)(9)) or under section 418E of such Code--
                          (i) the suspension of benefits shall not be 
                        taken into account in applying subparagraph 
                        (A); and
                          (ii) except as provided in subparagraph (B), 
                        the loan amount shall be the amount sufficient 
                        to provide benefits of participants and 
                        beneficiaries of the plan in pay status and 
                        terminated vested benefits at the time the loan 
                        is made, determined without regard to the 
                        suspension, including retroactive payment of 
                        benefits which would otherwise have been 
                        payable during the period of the suspension.
          (2) Coordination with pbgc financial assistance.--
                  (A) In general.--In the case of a plan which is also 
                applying for financial assistance under section 4261(d) 
                of the Employee Retirement Income Security Act of 1974 
                (29 U.S.C. 1431(d))--
                          (i) the plan sponsor shall submit the loan 
                        application and the application for financial 
                        assistance jointly to the Pension 
                        Rehabilitation Administration and the Pension 
                        Benefit Guaranty Corporation with the 
                        information necessary to determine the 
                        eligibility for and amount of the loan under 
                        this section and the financial assistance under 
                        section 4261(d) of such Act; and
                          (ii) if such financial assistance is granted, 
                        the amount of the loan under subsection (a) 
                        shall not exceed an amount equal to the excess 
                        of--
                                  (I) the amount determined under 
                                paragraph (1)(A) or (1)(C)(ii) 
                                (whichever is applicable), without 
                                regard to paragraph (1)(B); over
                                  (II) the amount of such financial 
                                assistance.
                  (B) Plans already receiving pbgc assistance.--The 
                Director of the Pension Rehabilitation Administration 
                shall provide for a simplified application for the loan 
                under this section which may be used by an insolvent 
                plan which has not been terminated and which is already 
                receiving financial assistance (other than under 
                section 4261(d) of such Act) from the Pension Benefit 
                Guaranty Corporation at the time of the application for 
                the loan under this section.
          (3) Use of loan funds.--
                  (A) In general.--The loan received under subsection 
                (a) shall be used to purchase annuity contracts which 
                meet the requirements of subparagraph (B) or to 
                implement a portfolio described in subparagraph (C) (or 
                a combination of the two) to provide the benefits 
                described in paragraph (1).
                  (B) Annuity contract requirements.--The annuity 
                contracts purchased under subparagraph (A) shall be 
                issued by an insurance company which is licensed to do 
                business under the laws of any State and which is rated 
                A or better by a nationally recognized statistical 
                rating organization, and the purchase of such contracts 
                shall meet all applicable fiduciary standards under the 
                Employee Retirement Income Security Act of 1974.
                  (C) Portfolio.--
                          (i) In general.--A portfolio described in 
                        this subparagraph is--
                                  (I) a cash matching portfolio or 
                                duration matching portfolio consisting 
                                of investment grade (as rated by a 
                                nationally recognized statistical 
                                rating organization) fixed income 
                                investments, including United States 
                                dollar-denominated public or private 
                                debt obligations issued or guaranteed 
                                by the United States or a foreign 
                                issuer, which are tradeable in United 
                                States currency and are issued at fixed 
                                or zero coupon rates; or
                                  (II) any other portfolio prescribed 
                                by the Secretary of the Treasury in 
                                regulations which has a similar risk 
                                profile to the portfolios described in 
                                subclause (I) and is equally protective 
                                of the interests of participants and 
                                beneficiaries.
                        Once implemented, such a portfolio shall be 
                        maintained until all liabilities to 
                        participants and beneficiaries in pay status at 
                        the time of the loan are satisfied.
                          (ii) Fiduciary duty.--Any investment manager 
                        of a portfolio under this subparagraph shall 
                        acknowledge in writing that such person is a 
                        fiduciary under the Employee Retirement Income 
                        Security Act of 1974 with respect to the plan.
                          (iii) Treatment of participants and 
                        beneficiaries.--Participants and beneficiaries 
                        covered by a portfolio under this subparagraph 
                        shall continue to be treated as participants 
                        and beneficiaries of the plan, including for 
                        purposes of title IV of the Employee Retirement 
                        Income Security Act of 1974.
                  (D) Accounting.--
                          (i) In general.--Annuity contracts purchased 
                        and portfolios implemented under this paragraph 
                        shall be used solely to provide the benefits 
                        described in paragraph (1) until all such 
                        benefits have been paid and shall be accounted 
                        for separately from the other assets of the 
                        plan.
                          (ii) Oversight of non-annuity investments.--
                                  (I) In general.--Any portfolio 
                                implemented under this paragraph shall 
                                be subject to oversight by the Pension 
                                Rehabilitation Administration, 
                                including a mandatory triennial review 
                                of the adequacy of the portfolio to 
                                provide the benefits described in 
                                paragraph (1) and approval (to be 
                                provided within a reasonable period of 
                                time) of any decision by the plan 
                                sponsor to change the investment 
                                manager of the portfolio.
                                  (II) Remedial action.--If the 
                                triennial review under subclause (I) 
                                determines an inadequacy, the plan 
                                sponsor shall take remedial action to 
                                ensure that the inadequacy will be 
                                cured within 5 years of the review.
                  (E) Ombudsperson.--The Participant and Plan Sponsor 
                Advocate established under section 4004 of the Employee 
                Retirement Income Security Act of 1974 shall act as 
                ombudsperson for participants and beneficiaries on 
                behalf of whom annuity contracts are purchased or who 
                are covered by a portfolio under this paragraph.
  (e) Collection of Repayment.--Except as provided in subsection (f), 
the Pension Rehabilitation Administration shall make every effort to 
collect repayment of loans under this section in accordance with 
section 3711 of title 31, United States Code.
  (f) Loan Default.--If a plan is unable to make any payment on a loan 
under this section when due, the Pension Rehabilitation Administration 
shall negotiate with the plan sponsor revised terms for repayment 
(including installment payments over a reasonable period or forgiveness 
of a portion of the loan principal), but only to the extent necessary 
to avoid insolvency in the subsequent 18 months.
  (g) Authority to Issue Rules, etc.--The Director of the Pension 
Rehabilitation Administration, in consultation with the Pension Benefit 
Guaranty Corporation and the Department of Labor, is authorized to 
issue rules regarding the form, content, and process of applications 
for loans under this section, actuarial standards and assumptions to be 
used in making estimates and projections for purposes of such 
applications, and assumptions regarding interest rates, mortality, and 
distributions with respect to a portfolio described in subsection 
(d)(3)(C).
  (h) Coordination With Taxation of Unrelated Business Income.--
Subparagraph (A) of section 514(c)(6) of the Internal Revenue Code of 
1986 is amended--
          (1) by striking ``or'' at the end of clause (i);
          (2) by striking the period at the end of clause (ii)(II) and 
        inserting ``, or''; and
          (3) by adding at the end the following new clause:
                          ``(iii) indebtedness with respect to a 
                        multiemployer plan under a loan made by the 
                        Pension Rehabilitation Administration pursuant 
                        to section 4 of the Rehabilitation for 
                        Multiemployer Pensions Act of 2019.''.

SEC. 5. COORDINATION WITH WITHDRAWAL LIABILITY AND FUNDING RULES.

  (a) Amendment to Internal Revenue Code of 1986.--Section 432 of the 
Internal Revenue Code of 1986 is amended by adding at the end the 
following new subsection:
  ``(k) Special Rules for Plans Receiving Pension Rehabilitation 
Loans.--
          ``(1) Determination of withdrawal liability.--
                  ``(A) In general.--If any employer participating in a 
                plan at the time the plan receives a loan under section 
                4(a) of the Rehabilitation for Multiemployer Pensions 
                Act of 2019 withdraws from the plan before the end of 
                the 30-year period beginning on the date of the loan, 
                the withdrawal liability of such employer shall be 
                determined under the Employee Retirement Income 
                Security Act of 1974--
                          ``(i) by applying section 4219(c)(1)(D) of 
                        the Employee Retirement Income Security Act of 
                        1974 as if the plan were terminating by the 
                        withdrawal of every employer from the plan, and
                          ``(ii) by determining the value of 
                        nonforfeitable benefits under the plan at the 
                        time of the deemed termination by using the 
                        interest assumptions prescribed for purposes of 
                        section 4044 of the Employee Retirement Income 
                        Security Act of 1974, as prescribed in the 
                        regulations under section 4281 of the Employee 
                        Retirement Income Security Act of 1974 in the 
                        case of such a mass withdrawal.
                  ``(B) Annuity contracts and investment portfolios 
                purchased with loan funds.--Annuity contracts purchased 
                and portfolios implemented under section 4(d)(3) of the 
                Rehabilitation for Multiemployer Pensions Act of 2019 
                shall not be taken into account in determining the 
                withdrawal liability of any employer under subparagraph 
                (A), but the amount equal to the greater of--
                          ``(i) the benefits provided under such 
                        contracts or portfolios to participants and 
                        beneficiaries, or
                          ``(ii) the remaining payments due on the loan 
                        under section 4(a) of such Act,
                shall be so taken into account.
          ``(2) Coordination with funding requirements.--In the case of 
        a plan which receives a loan under section 4(a) of the 
        Rehabilitation for Multiemployer Pensions Act of 2019--
                  ``(A) annuity contracts purchased and portfolios 
                implemented under section 4(d)(3) of such Act, and the 
                benefits provided to participants and beneficiaries 
                under such contracts or portfolios, shall not be taken 
                into account in determining minimum required 
                contributions under section 412,
                  ``(B) payments on the interest and principal under 
                the loan, and any benefits owed in excess of those 
                provided under such contracts or portfolios, shall be 
                taken into account as liabilities for purposes of such 
                section, and
                  ``(C) if such a portfolio is projected due to 
                unfavorable investment or actuarial experience to be 
                unable to fully satisfy the liabilities which it 
                covers, the amount of the liabilities projected to be 
                unsatisfied shall be taken into account as liabilities 
                for purposes of such section.''.
  (b) Amendment to Employee Retirement Income Security Act of 1974.--
Section 305 of the Employee Retirement Income Security Act of 1974 (29 
U.S.C. 1085) is amended by adding at the end the following new 
subsection:
  ``(k) Special Rules for Plans Receiving Pension Rehabilitation 
Loans.--
          ``(1) Determination of withdrawal liability.--
                  ``(A) In general.--If any employer participating in a 
                plan at the time the plan receives a loan under section 
                4(a) of the Rehabilitation for Multiemployer Pensions 
                Act of 2019 withdraws from the plan before the end of 
                the 30-year period beginning on the date of the loan, 
                the withdrawal liability of such employer shall be 
                determined--
                          ``(i) by applying section 4219(c)(1)(D) as if 
                        the plan were terminating by the withdrawal of 
                        every employer from the plan, and
                          ``(ii) by determining the value of 
                        nonforfeitable benefits under the plan at the 
                        time of the deemed termination by using the 
                        interest assumptions prescribed for purposes of 
                        section 4044, as prescribed in the regulations 
                        under section 4281 in the case of such a mass 
                        withdrawal.
                  ``(B) Annuity contracts and investment portfolios 
                purchased with loan funds.--Annuity contracts purchased 
                and portfolios implemented under section 4(d)(3) of the 
                Rehabilitation for Multiemployer Pensions Act of 2019 
                shall not be taken into account in determining the 
                withdrawal liability of any employer under subparagraph 
                (A), but the amount equal to the greater of--
                          ``(i) the benefits provided under such 
                        contracts or portfolios to participants and 
                        beneficiaries, or
                          ``(ii) the remaining payments due on the loan 
                        under section 4(a) of such Act,
                shall be so taken into account.
          ``(2) Coordination with funding requirements.--In the case of 
        a plan which receives a loan under section 4(a) of the 
        Rehabilitation for Multiemployer Pensions Act of 2019--
                  ``(A) annuity contracts purchased and portfolios 
                implemented under section 4(d)(3) of such Act, and the 
                benefits provided to participants and beneficiaries 
                under such contracts or portfolios, shall not be taken 
                into account in determining minimum required 
                contributions under section 302,
                  ``(B) payments on the interest and principal under 
                the loan, and any benefits owed in excess of those 
                provided under such contracts or portfolios, shall be 
                taken into account as liabilities for purposes of such 
                section, and
                  ``(C) if such a portfolio is projected due to 
                unfavorable investment or actuarial experience to be 
                unable to fully satisfy the liabilities which it 
                covers, the amount of the liabilities projected to be 
                unsatisfied shall be taken into account as liabilities 
                for purposes of such section.''.

SEC. 6. ISSUANCE OF TREASURY BONDS.

  The Secretary of the Treasury (in consultation with the Director of 
the Pension Rehabilitation Administration established under section 2) 
shall from time to time transfer from the general fund of the Treasury 
to the Pension Rehabilitation Trust Fund established under section 9512 
of the Internal Revenue Code of 1986 such amounts as are necessary to 
fund the loan program under section 4 of this Act, including from 
proceeds from the Secretary's issuance of obligations under chapter 31 
of title 31, United States Code.

SEC. 7. REPORTS OF PLANS RECEIVING PENSION REHABILITATION LOANS.

  (a) In General.--Subpart E of part III of subchapter A of chapter 61 
of the Internal Revenue Code of 1986 is amended by adding at the end 
the following new section:

``SEC. 6059A. REPORTS OF PLANS RECEIVING PENSION REHABILITATION LOANS.

  ``(a) In General.--In the case of a plan receiving a loan under 
section 4(a) of the Rehabilitation for Multiemployer Pensions Act of 
2019, with respect to the first plan year beginning after the date of 
the loan and each of the 29 succeeding plan years, not later than the 
90th day of each such plan year the plan sponsor shall file with the 
Secretary a report (including appropriate documentation and actuarial 
certifications from the plan actuary, as required by the Secretary) 
that contains--
          ``(1) the funded percentage (as defined in section 432(i)(2)) 
        as of the first day of such plan year, and the underlying 
        actuarial value of assets (determined with regard, and without 
        regard, to annuity contracts purchased and portfolios 
        implemented with proceeds of such loan) and liabilities 
        (including any amounts due with respect to such loan) taken 
        into account in determining such percentage,
          ``(2) the market value of the assets of the plan (determined 
        as provided in paragraph (1)) as of the last day of the plan 
        year preceding such plan year,
          ``(3) the total value of all contributions made by employers 
        and employees during the plan year preceding such plan year,
          ``(4) the total value of all benefits paid during the plan 
        year preceding such plan year,
          ``(5) cash flow projections for such plan year and the 9 
        succeeding plan years, and the assumptions used in making such 
        projections,
          ``(6) funding standard account projections for such plan year 
        and the 9 succeeding plan years, and the assumptions relied 
        upon in making such projections,
          ``(7) the total value of all investment gains or losses 
        during the plan year preceding such plan year,
          ``(8) any significant reduction in the number of active 
        participants during the plan year preceding such plan year, and 
        the reason for such reduction,
          ``(9) a list of employers that withdrew from the plan in the 
        plan year preceding such plan year, and the resulting reduction 
        in contributions,
          ``(10) a list of employers that paid withdrawal liability to 
        the plan during the plan year preceding such plan year and, for 
        each employer, a total assessment of the withdrawal liability 
        paid, the annual payment amount, and the number of years 
        remaining in the payment schedule with respect to such 
        withdrawal liability,
          ``(11) any material changes to benefits, accrual rates, or 
        contribution rates during the plan year preceding such plan 
        year, and whether such changes relate to the terms of the loan,
          ``(12) details regarding any funding improvement plan or 
        rehabilitation plan and updates to such plan,
          ``(13) the number of participants and beneficiaries during 
        the plan year preceding such plan year who are active 
        participants, the number of participants and beneficiaries in 
        pay status, and the number of terminated vested participants 
        and beneficiaries,
          ``(14) the amount of any financial assistance received under 
        section 4261 of the Employee Retirement Income Security Act of 
        1974 to pay benefits during the preceding plan year, and the 
        total amount of such financial assistance received for all 
        preceding years,
          ``(15) the information contained on the most recent annual 
        funding notice submitted by the plan under section 101(f) of 
        the Employee Retirement Income Security Act of 1974,
          ``(16) the information contained on the most recent annual 
        return under section 6058 and actuarial report under section 
        6059 of the plan, and
          ``(17) copies of the plan document and amendments, other 
        retirement benefit or ancillary benefit plans relating to the 
        plan and contribution obligations under such plans, a breakdown 
        of administrative expenses of the plan, participant census data 
        and distribution of benefits, the most recent actuarial 
        valuation report as of the plan year, copies of collective 
        bargaining agreements, and financial reports, and such other 
        information as the Secretary, in consultation with the Director 
        of the Pension Rehabilitation Administration, may require.
  ``(b) Electronic Submission.--The report required under subsection 
(a) shall be submitted electronically.
  ``(c) Information Sharing.--The Secretary shall share the information 
in the report under subsection (a) with the Secretary of Labor and the 
Director of the Pension Benefit Guaranty Corporation.
  ``(d) Report to Participants, Beneficiaries, and Employers.--Each 
plan sponsor required to file a report under subsection (a) shall, 
before the expiration of the time prescribed for the filing of such 
report, also provide a summary (written in a manner so as to be 
understood by the average plan participant) of the information in such 
report to participants and beneficiaries in the plan and to each 
employer with an obligation to contribute to the plan.''.
  (b) Penalty.--Subsection (e) of section 6652 of the Internal Revenue 
Code of 1986 is amended--
          (1) by inserting ``, 6059A (relating to reports of plans 
        receiving pension rehabilitation loans)'' after ``deferred 
        compensation)'';
          (2) by inserting ``($100 in the case of failures under 
        section 6059A)'' after ``$25''; and
          (3) by adding at the end the following: ``In the case of a 
        failure with respect to section 6059A, the amount imposed under 
        this subsection shall not be paid from the assets of the 
        plan.''.
  (c) Clerical Amendment.--The table of sections for subpart E of part 
III of subchapter A of chapter 61 of the Internal Revenue Code of 1986 
is amended by adding at the end the following new item:

``Sec. 6059A. Reports of plans receiving pension rehabilitation 
loans.''.

SEC. 8. PBGC FINANCIAL ASSISTANCE.

  (a) In General.--Section 4261 of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1431) is amended by adding at the end 
the following new subsection:
  ``(d)(1) The plan sponsor of a multiemployer plan--
          ``(A) which is in critical and declining status (within the 
        meaning of section 305(b)(6)) as of the date of the enactment 
        of this subsection, or with respect to which a suspension of 
        benefits has been approved under section 305(e)(9) as of such 
        date;
          ``(B) which, as of such date of enactment, is in critical 
        status (within the meaning of section 305(b)(2)), has a funded 
        percentage of less than 40 percent (as determined for purposes 
        of section 305), and has a ratio of active to inactive 
        participants which is less than 2 to 3; or
          ``(C) which is insolvent for purposes of section 418E of the 
        Internal Revenue Code of 1986 as of such date of enactment, if 
        the plan became insolvent after December 16, 2014, and has not 
        been terminated;
and which is applying for a loan under section 4(a) of the 
Rehabilitation for Multiemployer Pensions Act of 2019 may also apply to 
the corporation for financial assistance under this subsection, by 
jointly submitting such applications in accordance with section 4(d)(2) 
of such Act. The application for financial assistance under this 
subsection shall demonstrate, based on projections by the plan actuary, 
that after the receipt of the anticipated loan amount under section 
4(a) of such Act, the plan will still become (or remain) insolvent 
within the 30-year period beginning on the date of the loan.
  ``(2) In reviewing an application under paragraph (1), the 
corporation shall review the demonstrations and assumptions submitted 
with the loan application under section 4(c) of the Rehabilitation for 
Multiemployer Pensions Act of 2019 and provide guidance regarding such 
assumptions prior to approving any application for financial assistance 
under this subsection. The corporation may deny any application if the 
assumptions and determinations are unreasonable, or inconsistent with 
rules issued by the corporation, and the plan and the corporation are 
unable to reach agreement on such assumptions and determinations.
  ``(3) In the case of a plan described in paragraph (1)(A) or (1)(B), 
the financial assistance provided pursuant to such application under 
this subsection shall be the amount (determined by the plan actuary and 
submitted on the application) equal to the sum of--
          ``(A) the percentage of benefits of participants and 
        beneficiaries of the plan in pay status at the time of the 
        application, and
          ``(B) the percentage of future benefits to which participants 
        who have separated from service but are not yet in pay status 
        are entitled,
which, if such percentage were paid by the corporation in combination 
with the loan, would allow the plan to avoid projected insolvency. Such 
amount shall not exceed the maximum guaranteed benefit with respect to 
all participants and beneficiaries of the plan under sections 4022A and 
4022B. For this purpose, the maximum guaranteed benefit amount shall be 
determined by disregarding any loan available from the Pension 
Rehabilitation Administration and shall be determined as if the plan 
were insolvent on the date of the application. Further, the present 
value of the maximum guaranteed benefit amount with respect to such 
participants and beneficiaries may be calculated in the aggregate, 
rather than by reference to the benefit of each such participant or 
beneficiary.
  ``(4) In the case of a plan described in paragraph (1)(C), the 
financial assistance provided pursuant to such application under this 
subsection shall be the amount (determined by the plan actuary and 
submitted on the application) which, if such amount were paid by the 
corporation in combination with the loan and any other assistance being 
provided to the plan by the corporation at the time of the application, 
would enable the plan to emerge from the projected insolvency.
  ``(5)(A) Except as provided in subparagraph (B), the corporation 
shall provide the financial assistance under this subsection only in 
such amounts as the corporation determines, at the time of approval and 
at the beginning of each plan year beginning thereafter during the 
period of assistance, are necessary for the plan to avoid insolvency 
during the 5 plan year period beginning with the current plan year.
  ``(B) In the case of a plan described in paragraph (1)(C), the 
financial assistance under this subsection shall be provided in a lump 
sum if deemed necessary by the corporation, and in no case later than 
December 31, 2020.
  ``(6) Subsections (b) and (c) shall apply to financial assistance 
under this subsection as if it were provided under subsection (a), 
except that the terms for repayment under subsection (b)(2) shall not 
require the financial assistance to be repaid before the date on which 
the loan under section 4(a) of the Rehabilitation for Multiemployer 
Pensions Act of 2019 is repaid in full.
  ``(7) The corporation may forgo repayment of the financial assistance 
provided under this subsection if necessary to avoid any suspension of 
the accrued benefits of participants.''.
  (b) Appropriations.--There is appropriated to the Director of the 
Pension Benefit Guaranty Corporation such sums as may be necessary for 
each fiscal year to provide the financial assistance described in 
section 4261(d) of the Employee Retirement Income Security Act of 1974 
(29 U.S.C. 1431(d)) (as added by this section) (including necessary 
administrative and operating expenses relating to such assistance).

                          Purpose and Summary

    The purpose of H.R. 397, the Rehabilitation for 
Multiemployer Pensions Act, is to address the immediate 
multiemployer pension crisis and fully protect retirees' 
pensions.
    A multiemployer pension plan is a collectively bargained 
plan involving multiple employers--often within the same or 
related industries--and a labor union. Multiemployer pension 
plans are managed by a board of trustees consisting of an equal 
number of members appointed by the union and the employers. 
Multiemployer pension plans are found in industries such as 
construction, trucking, roofing, food service, industrial 
baking, manufacturing, sheet metal working, and coal mining, 
among others. There are approximately 1,400 multiemployer 
pension plans in the United States covering over 10 million 
participants and including approximately 200,000 contributing 
employers.
    Due to several factors, including deregulation, decline in 
union density, financial crises, mature plans with a large 
ratio of retirees to active workers, and lack of new employers 
with active workers making contributions, approximately 130 
multiemployer pension plans are in severe financial distress. 
These plans cover over 1 million participants. A few large and 
financially distressed plans, such as the United Mine Workers 
of America (UMWA) Pension Plan of 1974 and the Teamsters 
Central States Pension Fund (Central States), are projected to 
be insolvent in the next few years. Other plans are projected 
to run out of money over the next 20 years.
    Making matters worse, the Pension Benefit Guaranty 
Corporation's (PBGC) multiemployer program, which insures these 
pension plans, is on the brink of collapse. In fact, according 
to the PBGC's 2018 Annual Report, its multiemployer program has 
approximately $2.3 billion in assets to meet $56 billion in 
liabilities.\1\ The PBGC estimates that its multiemployer 
program's ``risk of insolvency rises rapidly and is likely to 
occur by the end of the Fiscal Year 2025.''\2\
---------------------------------------------------------------------------
    \1\PBGC, Annual Report (2018), https://www.pbgc.gov/sites/default/
files/pbgc-annual-report-2018.pdf.
    \2\Id.
---------------------------------------------------------------------------
    If multiemployer pension plans go insolvent and the PBGC's 
multiemployer program collapses, there will be catastrophic 
consequences for retirees, workers, and businesses. There also 
will be enormous costs to taxpayers, as the federal government 
will lose tax revenue from lost pension income and face 
increased spending on social safety net programs.
    Congress passed legislation entitled the Multiemployer 
Pension Reform Act of 2014 (MPRA) (Division O of Pub. L. 113-
235) with the intent to address the crisis. However, it is now 
clear that MPRA--and other existing laws--will not save the 
plans most in need of help nor prevent the collapse of the 
PBGC's multiemployer program. It is necessary for Congress to 
act again and soon. H.R. 397 is the only bipartisan legislative 
solution introduced in Congress that addresses the immediate 
multiemployer pension crisis without requiring cuts to 
retirees' pensions.

                            Committee Action


                             115TH CONGRESS

    On November 16, 2017, Congressman Richard Neal (D-MA-1) 
introduced H.R. 4444, the Rehabilitation for Multiemployer 
Pensions Act. H.R. 4444 was referred to the House Committees on 
Education and the Workforce, Ways and Means, and 
Appropriations. No further action was taken on the bill.
    On November 29, 2017, the Health, Employment, Labor, and 
Pensions (HELP) Subcommittee of the House Education and 
Workforce Committee held a hearing entitled ``Financial 
Challenges Facing the Pension Benefit Guaranty Corporation: 
Implications for Pension Plans, Workers, and Retirees.'' The 
Honorable W. Thomas Reeder, Director, Pension Benefit Guaranty 
Corporation, was the only witness. During the hearing, Director 
Reeder testified in support of the Administration's budget 
proposal to prevent the insolvency of the PBGC's multiemployer 
program. However, Director Reeder acknowledged that such budget 
proposal was ``not the answer for making good on the promise'' 
that Central States and other plans have made to its 
participants.\3\
---------------------------------------------------------------------------
    \3\Financial Challenges Facing the Pension Benefit Guaranty 
Corporation: Implications for Pension Plans, Workers, and Retirees 
Before the Subcomm. on Health, Employment, Labor, and Pensions of the 
H. Comm. on Educ. and Workforce, 115th Cong. (2017) (statement of the 
Honorable W. Thomas Reeder, Director, Pension Benefit Guaranty 
Corporation).
---------------------------------------------------------------------------
    On February 9, 2018, Congress passed, and President Trump 
signed into law, the Bipartisan Budget Act of 2018 (BBA) 
(Public Law 115-123). It established the Joint Select Committee 
on the Solvency of Multiemployer Pension Plans (JSC). The JSC 
was comprised of eight members of the House and eight members 
of the Senate with equal representation from Democrats and 
Republicans. From the House Committee on Education and the 
Workforce, Representatives Robert C. ``Bobby'' Scott (D-VA-3), 
Virginia Foxx (R-NC-5), Donald Norcross (D-NJ-1), and Phil Roe 
(R-TN-1) were appointed to serve on the JSC. The JSC was 
charged with providing ``recommendations and legislative 
language that will significantly improve the solvency of 
multiemployer pension plans and the Pension Benefit Guaranty 
Corporation.''\4\
---------------------------------------------------------------------------
    \4\Bipartisan Budget Act of 2018, Pub. L. No. 115-123, Sec. 30422, 
132 Stat. 64 (2018), https://www.congress.gov/115/plaws/publ123/PLAW-
115publ123.pdf.
---------------------------------------------------------------------------
    The JSC conducted five hearings during 2018.
           On April 18, 2018, the JSC convened its 
        first public hearing entitled ``The History and 
        Structure of the Multiemployer Pension System.'' The 
        witnesses were: Mr. Thomas A. Barthold, Chief of Staff, 
        Joint Committee on Taxation, Washington, DC; and Mr. 
        Ted Goldman, Senior Pension Fellow, American Academy of 
        Actuaries, Washington, DC. The hearing provided JSC 
        Members with an overview of the multiemployer pension 
        system and the crisis confronting it.
           On May 17, 2018, the JSC convened its second 
        public hearing entitled ``The Structure and Financial 
        Outlook of the Pension Benefit Guaranty Corporation.'' 
        The witness was: The Honorable W. Thomas Reeder, 
        Director, Pension Benefit Guaranty Corporation, 
        Washington, DC. The hearing provided JSC Members with 
        an understanding of the PBGC and its financial outlook.
           On June 13, 2018, the JSC convened its third 
        public hearing entitled ``Employer Perspectives on 
        Multiemployer Pension Plans.'' The witnesses were: Mr. 
        Chris Langan, Vice President, UPS, Atlanta, GA; Ms. 
        Aliya Wong, Executive Director of Retirement Policy, 
        U.S. Chamber of Commerce, Washington, DC; Ms. Mary 
        Moorcamp, Chief Legal and External Affairs Officer, 
        Schnuck Markets, St. Louis, MO; and Mr. Burke Blackman, 
        President, Egger Steel Company, Sioux Falls, SD. The 
        hearing provided JSC Members insight into how 
        businesses of all sizes have been placed at risk by the 
        multiemployer pension crisis.
           On July 13, 2018, the JSC convened its 
        fourth public hearing entitled ``Understanding What's 
        at Stake for Current Workers and Retirees.'' The 
        hearing took place in Columbus, Ohio. The witnesses 
        were: Mr. Bill Martin, President, Spangler Candy 
        Company, Bryan, OH; Ms. Roberta Dell, Chief Union 
        Steward, Spangler Candy Company, Bryan, OH; Mr. David 
        Gardner, Chief Executive Officer, Alfred Nickles 
        Bakery, Inc., Navarre, OH; Mr. Larry Ward, Retired Coal 
        Miner and Former President of the United Mine Workers 
        of America, District 6, Hopedale, OH; Mr. Brian Slone, 
        Apprentice Instructor, Millwright Local 1090, Dayton, 
        OH; and Mr. Mike Walden, President, National United 
        Committee to Protect Pensions, Cuyahoga Falls, OH. The 
        hearing provided Ohio-based workers, employers, and 
        retirees the opportunity to discuss how the 
        multiemployer pension crisis impacts them.
           On July 25, 2018, the JSC convened its fifth 
        public hearing entitled ``How the Multiemployer Pension 
        System Affects Stakeholders.'' The witnesses were: Mr. 
        James Naughton, Assistant Professor and Donald P. 
        Jacobs Scholar, Kellogg School of Management, 
        Northwestern University, Evanston, IL; Mr. Joshua Rauh, 
        Director of Research and Senior Fellow, Hoover 
        Institution, Stanford University, Stanford, CA; Mr. 
        Kenneth Stribling, Retired Teamster, Milwaukee, WI; and 
        Mr. Timothy Lynch, Senior Director Government Relations 
        Practice, Morgan, Lewis, and Bockius LLP, Annapolis, 
        MD. The hearing provided stakeholders the opportunity 
        to discuss challenges with the multiemployer pension 
        system and suggest policy options to address the crisis 
        for the JSC's consideration.
    The JSC was unable to reach a bipartisan agreement before 
its statutory authorization terminated on December 31, 2018.

                             116TH CONGRESS

    On January 9, 2019, Congressman Richard Neal (D-MA-1) 
introduced H.R. 397, the Rehabilitation for Multiemployer 
Pensions Act. H.R. 397 establishes a Pension Rehabilitation 
Administration (PRA) within the U.S. Department of the Treasury 
(Treasury). The PRA finances loans for eligible failing 
multiemployer pension plans, plans that have suspended 
benefits, and some insolvent plans currently receiving 
financial assistance from the PBGC. Those pension plans that 
cannot remain solvent or become solvent with only a loan can 
apply to the PBGC for additional financial assistance in 
conjunction with a PRA loan. H.R. 397 was referred to the House 
Committees on Education and Labor, Ways and Means, and 
Appropriations.
    On March 7, 2019, the House Committee on Education and 
Labor held a legislative hearing entitled ``The Cost of 
Inaction: Why Congress Must Address the Multiemployer Pension 
Crisis'' (March 7th Hearing). The witnesses were: Mr. Josh 
Shapiro, Vice President, Pensions, American Academy of 
Actuaries, Washington, DC; Ms. Mary Moorcamp, Chief Legal and 
External Affairs Officer, Schnuck Markets, St. Louis, MO; Mr. 
James Morgan, Bakery Pension Fund Retiree, Blue Island, IL; Mr. 
James Naughton, Assistant Professor and Donald P. Jacobs 
Scholar, Kellogg School of Management, Northwestern University, 
Evanston, IL; Mr. Glenn Spencer, Senior Vice President, 
Employment Policy Division, U.S. Chamber of Commerce, 
Washington, DC; Mr. Charles Blahous, J. Fish and Lillian F. 
Smith Chair and Senior Research Strategist, Mercatus Center at 
George Mason University, Arlington, VA; and Ms. Mariah Becker, 
Director of Research and Education, National Coordinating 
Committee for Multiemployer Plans, Washington, DC. During the 
hearing, Members and witnesses discussed H.R. 397 and explored 
the costs and consequences to retirees, active workers, 
participating employers, and the federal government if Congress 
does not resolve the multiemployer pension crisis.
    On June 11, 2019, the House Committee on Education and 
Labor met for a full committee markup of H.R. 397. The 
Committee adopted an amendment in the nature of a substitute 
(ANS) offered by Congressman Robert C. ``Bobby'' Scott (D-VA-
3), Chairman, and reported the bill favorably, as amended, to 
the House of Representatives by a vote of 26-18. The ANS 
incorporated the core provisions of H.R. 397, with several 
modifications, including the following:
           It clarifies that the loan program's 
        eligibility is intended for those plans that are in the 
        most urgent need of help. The ANS limits the loan 
        program to those plans that, as of the date of 
        enactment, are in critical and declining status and any 
        critical status plan that is below 40% funded with an 
        active to inactive ratio of below 40 percent (i.e., 
        less than 2 active employees for every 3 retirees). 
        Those plans that went through the MPRA process to cut 
        retirees' benefits and some currently insolvent plans 
        also remain eligible for the loan program.
           It updates the dates by which the loan 
        program must be established and by which the guidance 
        regarding the loan program must be promulgated.
           It includes an alternative, accelerated 
        repayment schedule for loans. During the loan 
        application process, a plan may elect to pay interest-
        only on the loan for the first 20 years and then repay 
        the principal in 10 equal installments between year 20 
        and year 30. For those plans that elect the alternative 
        repayment schedule, the loan interest rate is reduced 
        by 50 basis points. If plans do not elect this option, 
        the payment schedule remains interest-only for 29 years 
        with the final interest and principal repayment due in 
        year 30.
           It provides additional detail on the 
        interest rates for loans, setting a floor and a 
        ceiling. Specifically, the ANS says the rate shall not 
        be lower than the interest rate on 30-year U.S. 
        Treasury securities on the first day of the calendar 
        year in which the loan was issued. For 2019, it would 
        be 2.97%. But the rate shall not be higher than the 30-
        year interest rate plus 20 basis points or the amount 
        that is sufficient to administer the program (whichever 
        is greater).
           It amends the standard by which the loan 
        application can be rejected. In the introduced version 
        of H.R. 397, the Director of the PRA had to conclude 
        the application's determinations and demonstrations 
        were ``clearly erroneous.'' In the ANS, the Director of 
        the PRA must conclude that the application's 
        determinations and demonstrations are ``unreasonable'' 
        or ``inconsistent'' with any rules issued to implement 
        the program.
           It includes a new determination in the loan 
        application process related to a plan's ability to 
        repay its loan. Specifically, if at the time of the 
        application, a plan determines that making full 
        payments on a 30-year repayment schedule would cause 
        the plan to be at risk of becoming insolvent within any 
        18-month period, then the loan amount shall be reduced 
        to an amount that the plan determines it can repay. 
        This determination is intended to assist with the 
        calculation of PBGC assistance. The ANS also makes 
        clear that any PBGC assistance is calculated at the 
        time of the PRA loan application.
           It includes language specifying that the PRA 
        shall make every effort to collect repayment of loans.
           It specifies that the PBGC assistance is 
        provided to the plans when cash flow needs require it 
        (within 5 years of insolvency).
    A diverse coalition supports H.R. 397, including: AARP, 
AFL-CIO, Bakery and Confectionary Union and Industry 
International Pension Fund, BlackRock, BNY Mellon, 
International Association of Machinists and Aerospace Workers 
(IAM), International Brotherhood of Boilermakers, International 
Brotherhood of Electrical Workers (IBEW), International 
Brotherhood of Teamsters (IBT), John Hancock, National Retirees 
Legislative Network (NLRN), Pension Rights Center, PNC 
Financial Services Group, United Food and Commercial Workers 
(UFCW), United Steelworkers (USW), and Western Conference of 
Teamsters Pension Trust.

                            Committee Views

    The House Committee on Education and Labor is committed to 
protecting retirees' multiemployer pensions and preventing the 
collapse of the multiemployer pension system and the PBGC's 
multiemployer program. Unless Congress acts, that collapse will 
inevitably occur and trigger a catastrophe for retirees, active 
workers, employers, and taxpayers.

             MULTIEMPLOYER PENSION CRISIS: HARM TO RETIREES

    Through no fault of their own, retirees are at risk of 
losing nearly everything for which they worked and sacrificed 
over their careers. One non-partisan witness testified at the 
March 7th Hearing that--if Congress doesn't act--pension cuts 
could be 90 percent or more.\5\ During one of the JSC's 
hearings in 2018, one witness, Larry Ward, a retired 
mineworker, said that his pension was below the UMWA's average 
of $582 per month.\6\ Mr. Ward estimated that, if the UMWA's 
plan fails and the PBGC goes insolvent, then the average UMWA 
pensioner ``would see a cut of about 90%'' that would 
``devastate'' him and other mineworkers.\7\
---------------------------------------------------------------------------
    \5\The Cost of Inaction: Why Congress Must Address the 
Multiemployer Pension Crisis Before the Subcomm. on Health, Employment, 
Labor, and Pensions of the H. Comm. on Educ. and Labor, 116th Cong. 
(2019) (written testimony of Josh Shapiro at 3).
    \6\Understanding What's at Stake for Current Workers and Retirees 
Before the Joint Select Committee on the Solvency of Multiemployer 
Pension Plans, 115th Cong. (2018) (written testimony of Larry Ward at 
1).
    \7\Id. at 3.
---------------------------------------------------------------------------

               MULTIEMPLOYER PENSION CRISIS: LOSS OF JOBS

    It is not only retirees who would suffer if large and 
financially distressed plans fail. Those currently employed--
the active workers--would be harmed as well. A conservative 
economist conducted a macroeconomic analysis of what would 
happen if Central State collapsed in 2025 (as is currently 
projected). The analysis found that there would be a loss of 
more than 55,000 jobs across the United States in one year.\8\ 
Michigan and Missouri ``would be hardest hit, each facing job 
losses of more than 4,000.''\9\ Twelve other states would lose 
more than 1,000 jobs: Florida, Georgia, Illinois, Indiana, 
Iowa, Kentucky, Minnesota, North Carolina, Tennessee, Texas, 
Virginia, and Wisconsin.\10\ This study projects that state and 
local tax revenue would decline by approximately $450 million 
and federal revenue by $1.2 billion in the year the plan is 
projected to become insolvent.\11\ The impact of Central 
States' potential insolvency is likely to stretch beyond one 
year. To that point, the analysis acknowledges that the case 
study ``could represent a lower-bound of the aggregate 
macroeconomic impact of the pending insolvency of Central 
States.''\12\
---------------------------------------------------------------------------
    \8\Alex Brill, The Crisis Facing Multiemployer Pension Plans 1 
(2018), https://edlabor.house.gov/imo/media/doc/
The%20Crisis%20Facing%20Multiemployer%20Pension%20Plans%20August%202018[
3][1].pdf.
    \9\Id. at 1.
    \10\Id. at 1.
    \11\Id. at 1.
    \12\Id. at 7.
---------------------------------------------------------------------------
    However, the negative impact to active workers is not 
limited to potential unemployment. Many active workers in 
failing plans are in unfair situations right now. For instance, 
active workers in failing plans are accruing little or no 
benefit for the contributions made by their employers. As the 
U.S. Chamber of Commerce has noted, ``[t]here are some 
employers paying $15.00 or more per hour to plans for every 
hour an employee works . . . employees understand that they are 
never going to receive a benefit that is commensurate with the 
contribution rate the employer is paying.''\13\ Bill Martin of 
Spangler Candy testified to this reality at one of the JSC 
hearings, noting that ``our Teamster employees will only 
receive a fraction of their promised retirement benefits 
because the Central States Pension Plan is going to FAIL.''\14\
---------------------------------------------------------------------------
    \13\United States Chamber of Commerce, The Multiemployer Pension 
Plan Crisis: Business and Jobs at Risk 4 (2018), https://
www.uschamber.com/sites/default/files/
multiemployer_report_businesses_and_jobs_at_risk_final.pdf.
    \14\Understanding What's at Stake for Current Workers and Retirees 
Before the Joint Select Committee on the Solvency of Multiemployer 
Pension Plans, 115th Cong. (2018) (written testimony of Bill Martin at 
1).
---------------------------------------------------------------------------

           MULTIEMPLOYER PENSION CRISIS: THREAT TO EMPLOYERS

    In addition to the challenges with retaining employees, 
employers face challenges to their continued viability due to 
the multiemployer pension crisis. This is primarily due to 
what's referred to as ``withdrawal liability.'' The 
Multiemployer Pension Plan Amendments Act of 1980 (MPPA) was 
intended to prevent employers from exiting a financially 
troubled multiemployer plan without paying a proportional share 
of the plan's underfunding.\15\ MPPA requires a withdrawal 
liability assessment from employers and a schedule of payments.
---------------------------------------------------------------------------
    \15\29 U.S.C. Sec. Sec. 1382 and 1391.
---------------------------------------------------------------------------
    However, in the instances when an employer withdraws 
because of bankruptcy, then it may not be possible to recover 
an employer's withdrawal liability. Two of Central States' 
major contributing employers exited the plan in 2001 and 2003 
and left $290 million and $403 million, respectively, in 
withdrawal liability unpaid after they went bankrupt.\16\ When 
this happens, the responsibilities of the unfunded liabilities 
shift to the remaining employers. This is referred to as the 
``last-man standing'' rule. In practice, this means remaining 
employers must make pension contributions for those employees 
who may have never worked for them or may have worked for one 
of their competitors or a company outside their region or 
industry. At the March 7th Hearing, Ms. Moorcamp affirmed this 
same point. Ms. Moorcamp testified that most of Schnuck 
Markets' contribution dollars to Central States for their 
Teamster employees pay the benefits of participants who never 
worked for Schnuck Markets.\17\
---------------------------------------------------------------------------
    \16\United States Government Accountability Office, Central States 
Pension Fund 28 (2018), https://www.gao.gov/assets/700/692265.pdf.
    \17\The Cost of Inaction: Why Congress Must Address the 
Multiemployer Pension Crisis Before the Subcomm. on Health, Employment, 
Labor, and Pensions of the H. Comm. on Educ. and Labor, 116th Cong. 
(2019) (written testimony of Mary Moorcamp at 3).
---------------------------------------------------------------------------
    The last man standing rule also has implications for the 
remaining employers' estimated withdrawal liability, as they 
are saddled with the unfunded pension liability resulting from 
those employers who exited the plan. Schnuck Markets reported 
that its share of Central States underfunding was estimated to 
be over $200 million.\18\ To put this in context, Schnuck 
Markets' entire Teamster payroll is $16.8 million.\19\ 
Similarly, the Spangler Candy Company, a family owned, Ohio-
based confectionary manufacturer that makes Dum Dum lollipops, 
among other candies, has seen its estimated Central States 
withdrawal liability skyrocket. According to Spangler, its 
``withdrawal liability is in the tens of millions of dollars, 
going up 12-15% per year, and it seems to have little 
correlation to our active workers or retirees.''\20\
---------------------------------------------------------------------------
    \18\Id. at 4.
    \19\Id.
    \20\Understanding What's at Stake for Current Workers and Retirees 
Before the Joint Select Committee on the Solvency of Multiemployer 
Pension Plans, 115th Cong. (2018) (written testimony of Bill Martin at 
2).
---------------------------------------------------------------------------
    While actual payment of withdrawal liability is not 
``booked'' until an employer withdraws or a plan terminates, 
the Financial Accounting Standards Board (FASB) requires 
contributing employers to disclose certain information on their 
financial statements about the multiemployer pension plan in 
which they participate.\21\ As the U.S. Chamber of Commerce has 
noted, ``[a]s the depth of the multiemployer pension crisis is 
increasing, employers are finding that ordinary business 
activities are being affected by the fear of the potential for 
withdrawal liability. Even though the employers have not been 
assessed a withdrawal liability, some banks and lenders are 
questioning these employers' creditworthiness, leading to less 
optimal lending rates or even denial of credit.''\22\ For 
instance, during one of the JSC hearings, one witness reported 
that, ``[t]hree years ago, our two banks called our loans. 
Their reason was ``Your exorbitant unfunded pension liability 
is too much of a liability and a risk for your business and for 
us!'''\23\
---------------------------------------------------------------------------
    \21\Financial Accounting Standards Board, Compensation-Retirement 
Benefits-Multiemployer Plans (2011), https://www.fasb.org/jsp/FASB/
Document_C/DocumentPage?cid=1176158943384&acceptedDisclaimer=true.
    \22\United States Chamber of Commerce, The Multiemployer Pension 
Plan Crisis: Business and Jobs at Risk 4 (2018), https://
www.uschamber.com/sites/default/files/
multiemployer_report_businesses_and_jobs_at_risk_final.pdf.
    \23\Understanding What's at Stake for Current Workers and Retirees 
Before the Joint Select Committee on the Solvency of Multiemployer 
Pension Plans, 115th Cong. (2018) (written testimony of David Gardner 
at 2).
---------------------------------------------------------------------------

            MULTIEMPLOYER PENSION CRISIS: COSTS TO TAXPAYERS

    If certain plans become insolvent and the PBGC's 
multiemployer program collapses, there would be enormous costs 
to taxpayers. Retirees, whose pensions would be cut to 
essentially zero, may be forced to turn to government 
assistance programs to make ends meet. There also would be a 
significant loss of tax revenue from lost pension income. In 
fact, according to one expert, the total costs--in terms of 
lost tax revenue and increased social safety net spending--is 
estimated between $170 billion and $240 billion over the 10-
year budget window and between $332 billion and $479 billion 
over 30 years.\24\
---------------------------------------------------------------------------
    \24\The Cost of Inaction: Why Congress Must Address the 
Multiemployer Pension Crisis Before the H. Subcomm. on Health, 
Employment, Labor, and Pensions of the H. Comm. on Educ. and Labor, 
116th Cong. (2019) (written testimony of Mariah Becker at 12).
---------------------------------------------------------------------------
    Even Douglas Holtz-Eakin of the American Action Form (AAF), 
a conservative public policy institute, has acknowledged that 
taxpayers will be financially responsible if Congress does not 
act to address the multiemployer pension crisis. In December 
2018, Mr. Holtz-Eakin wrote, ``[i]t is not simply a choice of 
committing federal funds or not. For Congress it is one of 
those `pay me now or pay me later' moments and the goal should 
be to minimize the necessary infusion.''\25\
---------------------------------------------------------------------------
    \25\Douglas Holtz-Eakin, A Cautionary Pension Lesson (2018), 
https://www.americanactionforum.org/daily-dish/a-cautionary-pension-
lesson/.
---------------------------------------------------------------------------

  PRESENT LAW IS NOT SUFFICIENT TO ADDRESS THE MULTIEMPLOYER PENSION 
              CRISIS: NEW LEGISLATIVE ACTION IS NECESSARY

    In December 2014, Congress passed and President Obama 
signed the MPRA into law. The MPRA increased the premiums that 
multiemployer pension plans pay to the PBGC and provided plans 
new tools to address projected insolvency. One of those tools 
permitted eligible multiemployer pension plans to apply to the 
Treasury to reduce participants' benefits to avoid insolvency. 
Central States was the first plan to apply to Treasury to 
reduce benefits for an estimated two-thirds of the plan's 
participants. In May 2016, Treasury rejected Central States' 
application finding that it failed to satisfy certain MPRA 
requirements. Another important and financially distressed plan 
that is projected to be insolvent in the next few years, the 
UMWA Pension Plan of 1974, is not a candidate for benefit 
reductions under MPRA.
    In April 2018, following the first JSC hearing, Congressman 
Scott submitted a question for the record (QFR) to one of the 
hearing's witnesses, Mr. Ted Goldman of the American Academy of 
Actuaries. In his QFR, Congressman Scott asked if present law 
was sufficient to address the looming failure of several large 
and financially distressed multiemployer pension plans and the 
insolvency of the PBGC's multiemployer program or if additional 
legislative action is necessary. Mr. Goldman responded to the 
QFR by saying that the provisions under the Pension Protection 
Act of 2006 and MPRA are ``not sufficient to avoid the looming 
insolvency for roughly 100 to 120 multiemployer plans.''\26\ 
The U.S. Chamber of Commerce made a similar point, noting that 
``there is nothing that exists under current law that will save 
the multiemployer system's most underfunded plans.''\27\ 
Specifically, there are no mechanisms or authorities within 
present law to save the largest and most financially distressed 
plans and there are insufficient resources in the PBGC's 
multiemployer program to prevent its collapse. As the U.S. 
Chamber of Commerce also noted, ``[i]t has become 
``increasingly clear that additional legislative solutions are 
necessary if the largest and most underfunded plans are to be 
saved. If these plans become insolvent, the negative 
repercussions will be felt throughout the U.S. economy.''\28\
---------------------------------------------------------------------------
    \26\The History and Structure of the Multiemployer Pension System 
Before the Joint Select Committee on the Solvency of Multiemployer 
Pension Plans, 115th Cong. (2018) (Response to a Question for the 
Record by Ted Goldman at 38-39).
    \27\United States Chamber of Commerce, The Multiemployer Pension 
Plan Crisis: The History, Legislation, and What's Next (2017), https://
www.uschamber.com/sites/default/files/multiemployer_report_-_chamber_-
final.pdf.
    \28\Id. at 2.
---------------------------------------------------------------------------

  H.R. 397 IS A RESPONSIBLE, BIPARTISAN SOLUTION TO THE MULTIEMPLOYER 
  PENSION CRISIS THAT SAFEGUARDS TAXPAYERS' MONEY AND SPARES RETIREES 
                                  HARM

    The multiemployer pension crisis has been debated and 
discussed extensively for years. The House Committee on 
Education and Labor has held four hearings on the multiemployer 
pension crisis since Congress last acted on the issue in 
December 2014, when it passed the MPRA. Congress also created a 
bipartisan, bicameral joint select committee on the 
multiemployer pension crisis in the BBA in 2018. That joint 
select committee convened five hearings. Those hearings 
established what is likely to happen if Congress does act. As 
the United States Chamber of Commerce put it:

          Retirees will see their standard of living reduced. 
        At a minimum, they will have less income to spend in 
        local economies. The reduced spending will be felt by 
        businesses, especially in small communities. Less money 
        spent by retirees also means less paid to local 
        government in sales and other taxes. When tax revenue 
        decreases, the demand for social programs will 
        increase, because many retirees will likely lose their 
        homes and/or have difficulty paying for medical 
        expenses. This will cause many to become reliant on 
        social programs that have to be funded by taxpayers at 
        a time when tax revenue will be declining. Simply put, 
        pension plan insolvencies and a PBGC collapse will have 
        a cumulative negative effect on entire communities. 
        Individuals, government, and businesses will all suffer 
        unless a solution is found.\29\

    \29\United States Chamber of Commerce, The Multiemployer Pension 
Plan Crisis: The History, Legislation, and What's Next 28 (2017), 
https://www.uschamber.com/sites/default/files/multiemployer_report_-
_chamber_-final.pdf.

    To date, there has been one bipartisan bill--H.R. 397--
introduced in Congress that addresses the immediate crisis, 
protects retirees' hard-earned pensions, avoids a lot of 
misery, and likely saves the taxpayers money compared with 
doing nothing.

                      Section-by-Section Analysis


Section 1. Short title

    The section specifies that the bill may be cited as the 
Rehabilitation for Multiemployer Pensions Act.

Section 2. Pension Rehabilitation Administration; establishment; powers

    This section establishes the Pension Rehabilitation 
Administration (PRA), a new agency within the U.S. Department 
of the Treasury. The PRA is headed by a Director, who is 
appointed by the President. The term of office of the Director 
is 5 years. The Director may appoint deputy directors, officers 
and employees. The Director may contract for financial and 
actuarial services. The Treasury Secretary may transfer funding 
within Treasury's appropriated budget that is reasonably 
necessary to fund the PRA's administrative and operating 
expenses.

Section 3. Pension Rehabilitation Trust Fund

    This section amends the relevant portion of the Internal 
Revenue Code (IRC) and adds a new section creating a Pension 
Rehabilitation Trust Fund (Fund). The Fund is comprised of the 
following amounts: proceeds from the sale of bonds/obligations 
detailed in Section 6, interest and principal payments on the 
loans to pension plans detailed in Section 4, and transfers of 
funding from the Treasury Secretary detailed in Section 2. 
Amounts in the Fund are available to the PRA without further 
appropriation for the purposes of implementing the loan program 
under Section 4, payment of principal and interest on bonds/
obligations under Section 6, and administrative and operating 
expenses of the PRA.

Section 4. Loan program for multiemployer defined benefit plans

    This section amends the relevant portions of the IRC and 
the Employee Retirement Income Security Act of 1974 (ERISA) to 
authorize the PRA to make loans to certain multiemployer plans. 
The section details the loan application process, interest 
rate, and repayment schedules. The section outlines certain 
requirements and conditions for receipt of a loan. The section 
also details how the loan can be invested and the way the loan 
investment portfolio is overseen.
    To be eligible for a loan, plans must fall into one of the 
following categories as of the date of enactment of the bill:
           Plans that are in ``critical and declining'' 
        status (projected to be insolvent within the next 15 
        years (or within 20 years in some situations));
           Plans which had a suspension of benefits 
        application approved under the MPRA;
           ``Critical'' status plans that are less than 
        40% funded and have an active to inactive participant 
        ratio of less than 2 to 3; or
           Currently insolvent plans that are receiving 
        assistance from the PBGC, if the insolvency occurred 
        after December 16, 2014.
    The Director of the PRA must consult and share loan 
application materials with the Secretaries of Treasury and 
Labor as well as the Director of the PBGC before making any 
loan.
    The loan program must be established no later than 
September 30, 2019. Guidance regarding the program must be 
promulgated by the Director of the PRA, in consultation with 
the PBGC and U.S. Department of Labor, no later than December 
31, 2019. However, the bill permits a plan to apply before 
either date and requires the PRA to approve the application and 
make the loan if it is necessary to avoid any suspension of 
pension benefits.
    The loan terms require the plan to make interest-only 
payments for 29 years with final interest and principal 
repayment due in year 30. However, the bill includes an 
alternative repayment schedule to incentivize early repayment 
of the loan. During the application process, a plan may elect 
to pay interest-only on the loan for the first 20 years and 
then repay the principal in 10 equal installments between year 
20 and year 30. For those plans that elect the alternative 
repayment schedule, the loan interest rate is reduced by 50 
basis points (0.5%).
    As a condition of receiving the loan, the plan must 
stipulate that it will not do any of the following during the 
loan period:
           Increase participants' benefits (excluding 
        the reinstating of those pensions benefits that were 
        previously cut under MPRA);
           Allow any employer to reduce contributions; 
        or
           Accept any collective bargaining agreement 
        that reduces contribution rates.
    The plan must also stipulate that it will do the following:
           In the case of a plan for which an 
        application for suspension of benefits under MPRA was 
        previously approved, reinstate benefits or not carry 
        out benefit cuts;
           Provide the statutorily required periodic 
        actuarial reports to the Internal Revenue Service;
           Continue to pay all premiums due to the 
        PBGC; and
           Meet other such requirements as the Director 
        of the PRA provides in the loan terms.
    Loans must have as low an interest rate as is feasible. 
Such rate must be determined by the PRA and must not be lower 
than the interest rate on 30-year Treasury securities on the 
first day of the calendar year in which the loan is issued (for 
2019, that is 2.97%). In addition, the rate must not exceed the 
above-mentioned interest rate plus 20 basis points (0.2%) or 
the amount that is sufficient to administer the program 
(whichever is greater).
    In applying to the PRA for a loan, the plan must 
demonstrate that:
           The loan will enable the plan to avoid 
        insolvency during the loan term, or for those plans 
        that are already insolvent, the loan will enable the 
        plan to emerge from insolvency within the remainder of 
        the 30-year period or avoid reentering insolvency 
        within the remainder of the 30-year period.
           The plan is reasonably expected to pay 
        benefits and the interest on the loan as well as 
        accumulate sufficient funds to repay the principal when 
        due.
    As part of the application process, the plan also must do 
the following:
           Provide its most recently filed Form 5500 
        and any other necessary information to enable the PRA 
        to determine the loan amount;
           Stipulate whether it is also applying for 
        PBGC financial assistance in combination with the loan 
        to enable the plan to avoid insolvency and protect 
        pensions;
           State how the loan proceeds will be 
        conservatively invested (further details below) and who 
        will be the investment manager; and
           Include such other information required by 
        the Director of the PRA.
    In evaluating the plan's application, the Director of the 
PRA must accept the determinations and demonstrations in the 
application unless the Director, in consultation with the 
Director of the PBGC and Secretary of Labor, concludes that 
such determinations and demonstrations are unreasonable or 
inconsistent with the rules issued by the Director (detailed 
below).
    The Director of the PRA is required to approve or deny the 
plan's application within 90 days after its submission. An 
application shall be deemed approved unless, within such 90 
days, the Director notifies the plan of its denial and the 
reasons for such denial. Any approval or denial of a plan's 
application by the Director of the PRA shall be treated as a 
final agency action.
    Any plan to which a suspension of benefits under MPRA has 
been approved is required to apply for a loan. For any such 
plan, the Director of the PRA shall provide for a simplified 
application process. The Director of the PRA is also required 
to provide for a simplified loan application process for 
insolvent plans already receiving PBGC financial assistance.
    The amount of the loan is the amount specified in the 
application to fund the plan's obligations for the benefits of 
participants, beneficiaries in pay status, and participants who 
separated from service but are not yet in pay status 
(``terminated vested'' participants) at the time the loan is 
made. However, if at the time of application, the plan 
determines that making full payments on a 30-year repayment 
schedule would cause the plan to be within 18 months of 
becoming insolvent at any point during the 30-year period, then 
the loan amount shall be reduced to an amount that the plan 
determines it can repay without becoming insolvent.
    For those plans that have suspended benefits, the requested 
loan amount must be sufficient to provide benefits, including 
the retroactive payment of benefits that would have been 
payable during the period of suspension.
    In the case of a plan that is also applying for financial 
assistance from the PBGC, the plan must jointly submit a loan 
application to the PRA and a financial assistance application 
to the PBGC with information necessary to determine eligibility 
for and amount of the loan and financial assistance. In such 
cases, if the financial assistance is granted, the amount of 
the assistance from the PBGC would be the amount necessary for 
the plan to become or remain solvent over the 30-year loan term 
(factoring in the amount of the loan from the PRA).
    Plans that receive a loan must invest it in one or a 
combination of the following low-risk options:
           Annuity contracts issued by an insurance 
        company with a credit rating of A or better by a 
        nationally recognized statistical credit rating 
        organization. The annuity contract purchase must meet 
        fiduciary standards under ERISA.
           Cash matching or duration matching 
        portfolios consisting of fixed income investments that 
        are investment grade (as rated by a nationally 
        recognized statistical credit rating organization)\30\
---------------------------------------------------------------------------
    \30\Cash matching is a strategy where the investor invests in 
certain securities with an expected return so that the investor will be 
able to pay for future liabilities. Duration matching is a strategy of 
assembling a bond portfolio so that the duration of the portfolio 
equals the duration of the investor's liability stream.
---------------------------------------------------------------------------
           Any other portfolios prescribed by the 
        Treasury Secretary in regulations that have a similar 
        low risk profile as cash matching or duration matching 
        and is equally protective of participants' and 
        beneficiaries' interests.
    Current law (the fiduciary provisions of Title I of ERISA) 
will govern the plan sponsor and the investment managers, who 
must acknowledge that they are plan fiduciaries under ERISA.
    Annuity contracts and portfolios shall be used solely to 
provide benefits to participants and beneficiaries until all 
benefits have been paid. These contracts and portfolios shall 
remain in the plan asset pool but shall be segregated from all 
other plan assets in terms of accounting and investment 
performance measures.
    Except in the case of annuity purchase, the PRA maintains 
oversight over all loan proceeds used to fund retiree 
liabilities. Such oversight shall include a mandatory triennial 
review of the adequacy of the portfolio to fund retiree 
benefits. If such review determines that there is an 
inadequacy, the plan must take remedial actions to cure such 
deficiency within five years. Such oversight will also include 
approval of any decision by the plan to change the investment 
manager overseeing the portfolio. The Participant and Plan 
Sponsor Advocate, a position that was established under ERISA 
in 2012 by the Moving Ahead for Progress in the 21st Century 
Act (MAP-21), will act as the ombudsman for participants and 
beneficiaries who had annuity contracts purchased for them and/
or are covered by portfolios.
    If a plan is unable to make payments on a loan when due, 
the PRA must negotiate revised terms for repayment with the 
plan, but only to the extent necessary to avoid insolvency in 
the following 18 months. Such revised terms include installment 
payments over a reasonable period or forgiveness of a portion 
of the loan principal.
    The Director of the PRA, in consultation with the PBGC and 
the U.S. Department of Labor, is authorized to issue rules 
regarding the form, content, and process of loan applications, 
the actuarial standards and assumptions to be used in making 
estimates and projections in the applications, and the 
assumptions regarding interest rates, mortality, and 
distributions with respect to the portfolios.
    The relevant portion of the IRC is amended to ensure that 
the PRA loan is not treated as unrelated business income.

Section 5. Coordination with withdrawal liability and funding rules

    This section amends the relevant portions of ERISA and the 
IRC to address how a plan's receipt of a PRA loan impacts the 
withdrawal liability of any employer that exits the plan before 
the end of the 30-year loan repayment period.\31\ The section 
also amends the relevant portions of ERISA and the IRC to 
address how a plan's receipt of a PRA loan impacts its minimum 
funding requirements.\32\
---------------------------------------------------------------------------
    \31\The Multiemployer Pension Plan Amendments Act of 1980 (MPPA), 
Pub. L. No. 96-364, 94 Stat. 1208, introduced withdrawal liability to 
prevent employers from exiting a financially troubled multiemployer 
plan without paying a proportional share of the plan's underfunding. In 
essence, withdrawal liability is the amount of money an employer owes 
when it leaves a plan based on the employer's share of the plan's 
unfunded vested benefits. MPPA required a withdrawal liability 
assessment from employers and a schedule of payments.
    \32\ERISA imposed minimum funding requirements on private sector 
pension plans. The minimum requirements are determined annually based 
on a notional ``funding standard account.'' Under the funding standard 
account calculations, employer contributions must cover plan costs, 
which include the normal cost and amortizations of changes in the 
unfunded liability over a fixed period.
---------------------------------------------------------------------------
    If an employer withdraws from a multiemployer plan before 
the end of the 30-year loan repayment period, the employer's 
withdrawal liability shall be calculated as if the plan was 
experiencing what is referred to as a ``mass withdrawal'' 
(which occurs when all or substantially all the employers in a 
multiemployer plan leave the plan). In practice, this means 
that the employer's liability would be calculated under the 
normal rules except there would not be a 20-year cap on the 
number of withdrawal liability payments. Further, the PBGC's 
single-employer plan termination actuarial assumptions are 
required to be used to value benefits.
    The annuity contracts and investment portfolios created by 
the loan proceeds would not be considered when determining any 
exiting employer's withdrawal liability, but either the 
benefits provided under such contracts and portfolios or the 
remaining payments due on the loan (whichever is greater) would 
be considered.
    The annuity contracts and fixed income portfolios purchased 
with the loan proceeds and the benefits covered by the annuity 
contracts or portfolios would not be considered in determining 
a plan's minimum funding requirements set forth by ERISA and 
the IRC. But the remaining payments due on the loan (interest 
and principal) as well as benefits not covered by the annuity 
contracts or portfolios would be considered.

Section 6. Issuance of treasury bonds

    The section describes how Treasury funds the loan program. 
Specifically, the Treasury Secretary shall transfer from the 
general fund to the Fund amounts necessary to fund the loan 
program, including proceeds from the Treasury Secretary's 
issuance of bonds/obligations.

Section 7. Reports of plans receiving pension rehabilitation loans

    The section amends the relevant portions of the IRC to 
include a new reporting requirement for plans that receive a 
PRA loan and a monetary penalty for those plans that fail to 
comply.
    For a plan receiving a PRA loan, it must file an annual 
report with the Treasury Secretary that includes the following 
information: its funded percentage, market value of plan 
assets, total value of contributions made by employers and 
employees, total value of benefits, cash flow projections 
(going back nine plan years), funding standard account 
projections (going back nine plan years) and the assumptions 
relied upon in making such projections, total value of 
investment gains or losses, and the number of participants and 
beneficiaries (including whether there has been any significant 
reduction in active participants and the reason for any such 
reduction).
    The annual report must also include a list of any employers 
that withdrew from the plan and paid withdrawal liability. The 
list must include any exiting employer's annual withdrawal 
liability payment amount and the number of years remaining on 
the payment schedule.
    The annual report must include information on any material 
changes to the benefits, accrual rates, and contribution rates, 
the amount of financial assistance received in that year and 
preceding ones, and the information contained on the most 
recent annual funding notice.
    The annual report must also include copies of the plan 
document and amendments, a breakdown of administrative expenses 
of the plan, participant census data and distribution of 
benefits, the most recent actuarial valuation report, copies of 
collective bargaining agreements and financial reports, and 
such other information as the Treasury Secretary, in 
consultation with the Director of the PRA, may require.
    The required report must be submitted electronically and be 
shared with the Secretary of Labor and the Director of the 
PBGC. Each plan submitting the required report must also 
provide a summary of it to each participant and beneficiary as 
well as to each contributing employer.
    In the case of a failure to provide the required report, 
the plan must pay $100 for each day during which such failure 
continues, and such amount must not be paid from the plan's 
assets.

Section 8. PBGC financial assistance

    The section amends the relevant portion of ERISA to detail 
the process by which eligible plans would apply for PBGC 
assistance, how the PBGC would review plan applications, and 
how PBGC assistance would be calculated and provided.
    Those plans eligible for a loan may apply jointly for a 
loan and financial assistance. The application for financial 
assistance to the PBGC must demonstrate, based on the plan's 
actuary, that after receipt of the anticipated loan amount, the 
plan will still be or remain insolvent within the 30-year 
period.
    In reviewing the plan's application for financial 
assistance, the PBGC shall review the demonstrations and 
assumptions submitted with the loan application and provide 
guidance regarding such assumptions prior to approving any 
application. The PBGC may deny any application if the 
assumptions and determinations are unreasonable or inconsistent 
with any rules it issues. The PBGC also may deny an application 
if the plan and the PBGC are unable to reach agreement on 
assumptions and determinations.
    The financial assistance provided to any plan shall be an 
amount equal to the sum of the percentage of future benefits 
payable to participants and beneficiaries in pay status and the 
percentage of benefits to which terminated vested participants 
are entitled, which if combined with the loan, would allow the 
plan to avoid projected insolvency. There is a limit on the 
amount of PBGC assistance a plan can receive. It cannot exceed 
the PBGC maximum guarantee benefit with respect to all 
participants and beneficiaries of the plan, and it must be 
determined as if the plan were insolvent at the date of the 
application.
    An insolvent plan currently receiving PBGC assistance under 
current law can apply for PBGC assistance under the terms of 
this bill. In such case, any additional PBGC financial 
assistance that is provided to an insolvent plan shall be in an 
amount that factors in the loan and the current PBGC assistance 
to enable the plan to emerge from insolvency.
    The PBGC shall provide the financial assistance in such 
amounts that it determines are necessary for the plan to avoid 
insolvency during the 5-plan year period beginning with the 
current plan year. However, in the case of insolvent plans, the 
PBGC financial assistance shall be provided in a lump sum, if 
necessary, no later than December 31, 2020.
    Current law provisions regarding the repayment of PBGC 
assistance shall apply to PBGC assistance under the terms of 
this bill, except that repayment of any assistance to the PBGC 
shall not be required to be repaid before the date on which the 
loan is repaid in full. The PBGC also may forgo repayment of 
the financial assistance if necessary to avoid the suspension 
of participants' accrued benefits. The section appropriates 
such sums as may be necessary for each fiscal year to enable 
the Director of the PBGC to provide this financial assistance, 
including necessary administrative and operating expenses 
relating to such assistance.

                       Explanation of Amendments

    The Amendment in the Nature of a Substitute is explained in 
the descriptive portions of this report.

              Application of Law to the Legislative Branch

    H.R. 397 does not apply to terms and conditions of 
employment or to access to public services or accommodations 
within the legislative branch.

                       Unfunded Mandate Statement

    Pursuant to Section 423 of the Congressional Budget and 
Impoundment Control Act (as amended by Section 101(a)(2) of the 
Unfunded Mandates Reform Act, Pub. L. 104-4), H.R. 397 contains 
no unfunded mandates. The Committee traditionally adopts as its 
own the cost estimate prepared by the Director of the 
Congressional Budget Office (CBO) pursuant to section 402 of 
the Congressional Budget Act of 1974. The Committee reports 
that because this cost estimate was not timely submitted to the 
Committee before the filing of this report, the Committee is 
not in a position to make a cost estimate for H.R. 1500, as 
amended.

                           Earmark Statement

    In accordance with clause 9 of rule XXI of the Rules of the 
House of Representatives, H.R. 397 does not contain any 
congressional earmarks, limited tax benefits, or limited tariff 
benefits as described in clauses 9(e), 9(f), and 9(g) of rule 
XXI.

                            Roll Call Votes

    In compliance with clause 3(b) of rule XIII of the Rules of 
the House of Representatives, the Committee advises that the 
following roll call votes occurred during the Committee's 
consideration of H.R. 397:


             Statement of Performance Goals and Objectives

    Pursuant to clause (3)(c) of rule XIII of the Rules of the 
House of Representatives, the goals of H.R. 397 are to protect 
and preserve Americans' hard-earned pensions.

                    Duplication of Federal Programs

    Pursuant to clause 3(c)(5) of rule XIII of the Rules of the 
House of Representatives, the Committee states that no 
provision of H.R. 397 establishes or reauthorizes a program of 
the Federal Government known to be duplicative of another 
federal program, a program that was included in any report from 
the Government Accountability Office to Congress pursuant to 
section 21 of Public Law 111-139, or a program related to a 
program identified in the most recent Catalog of Federal 
Domestic Assistance.

                                Hearings

    Pursuant to section 103(i) of H. Res. 6 for the 116th 
Congress, the Committee held a legislative hearing entitled 
``The Cost of Inaction: Why Congress Must Address the 
Multiemployer Pension Crisis,'' which was used to consider H.R. 
397. The Committee heard testimony and was presented with data 
on the costs and consequences to retirees, active workers, 
participating employers, and taxpayers if Congress does not 
resolve the multiemployer pension crisis. The Committee heard 
testimony from: Mr. Josh Shapiro, Vice President, Pensions, 
American Academy of Actuaries, Washington, DC; Ms. Mary 
Moorcamp, Chief Legal and External Affairs Officer, Schnuck 
Markets, St. Louis, MO; Mr. James Morgan, Bakery Pension Fund 
Retiree, Blue Island, IL; Mr. James Naughton, Assistant 
Professor and Donald P. Jacobs Scholar, Kellogg School of 
Management, Northwestern University, Evanston, IL; Mr. Glenn 
Spencer, Senior Vice President, Employment Policy Division, 
U.S. Chamber of Commerce, Washington, DC; Mr. Charles Blahous, 
J. Fish and Lillian F. Smith Chair and Senior Research 
Strategist, Mercatus Center at George Mason University, 
Arlington, VA; and Ms. Mariah Becker, Director of Research and 
Education, National Coordinating Committee for Multiemployer 
Plans, Washington, DC.

  Statement of Oversight Findings and Recommendations of the Committee

    In compliance with clause 3(c)(1) of rule XIII and clause 
2(b)(1) of rule X of the Rules of the House of Representatives, 
the Committee's oversight findings and recommendations are 
reflected in the descriptive portions of this report.

               New Budget Authority and CBO Cost Estimate

    Pursuant to clause 3(c)(2) of rule XIII of the Rules of the 
House of Representatives and section 308(a) of the 
Congressional Budget Act of 1974, and pursuant to clause 
3(c)(3) of rule XIII of the Rules of the House of 
Representatives and section 402 of the Congressional Budget Act 
of 1974, the Committee has requested but not received a cost 
estimate for the bill from the Director of the Congressional 
Budget Office.

                        Committee Cost Estimate

    Clause 3(d)(1) of rule XIII of the Rules of the House of 
Representatives requires an estimate and a comparison of the 
costs that would be incurred in carrying out H.R. 397. The 
Committee traditionally adopts as its own the cost estimate 
prepared by the Director of the Congressional Budget Office 
pursuant to section 402 of the Congressional Budget Act of 
1974. The Committee reports that because this cost estimate was 
not timely submitted to the Committee before the filing of this 
report, the Committee is not in a position to make a cost 
estimate for H.R. 397, as amended.

         Changes in Existing Law Made by the Bill, as Reported

    In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, H.R. 397, as reported, are shown as follows:

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italics, and existing law in which no 
change is proposed is shown in roman):

                     INTERNAL REVENUE CODE OF 1986



           *       *       *       *       *       *       *
Subtitle A--Income Taxes

           *       *       *       *       *       *       *


CHAPTER 1--NORMAL TAXES AND SURTAXES

           *       *       *       *       *       *       *


Subchapter D--DEFERRED COMPENSATION, ETC.

           *       *       *       *       *       *       *


   PART III--RULES RELATING TO MINIMUM FUNDING STANDARDS AND BENEFIT 
LIMITATIONS

           *       *       *       *       *       *       *


Subpart A--MINIMUM FUNDING STANDARDS FOR PENSION PLANS

           *       *       *       *       *       *       *


SEC. 432. ADDITIONAL FUNDING RULES FOR MULTIEMPLOYER PLANS IN 
                    ENDANGERED STATUS OR CRITICAL STATUS.

  (a) General rule.--For purposes of this part, in the case of 
a multiemployer plan in effect on July 16, 2006--
          (1) if the plan is in endangered status--
                  (A) the plan sponsor shall adopt and 
                implement a funding improvement plan in 
                accordance with the requirements of subsection 
                (c), and
                  (B) the requirements of subsection (d) shall 
                apply during the funding plan adoption period 
                and the funding improvement period,
          (2) if the plan is in critical status--
                  (A) the plan sponsor shall adopt and 
                implement a rehabilitation plan in accordance 
                with the requirements of subsection (e), and
                  (B) the requirements of subsection (f) shall 
                apply during the rehabilitation plan adoption 
                period and the rehabilitation period, and
          (3) if the plan is in critical and declining status--
                  (A) the requirements of paragraph (2) shall 
                apply to the plan; and
                  (B) the plan sponsor may, by plan amendment, 
                suspend benefits in accordance with the 
                requirements of subsection (e)(9).
  (b) Determination of endangered and critical status.--For 
purposes of this section--
          (1) Endangered status.--A multiemployer plan is in 
        endangered status for a plan year if, as determined by 
        the plan actuary under paragraph (3), the plan is not 
        in critical status for the plan year and is not 
        described in paragraph (5), and, as of the beginning of 
        the plan year, either--
                  (A) the plan's funded percentage for such 
                plan year is less than 80 percent, or
                  (B) the plan has an accumulated funding 
                deficiency for such 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).
        For purposes of this section, a plan shall be treated 
        as in seriously endangered status for a plan year if 
        the plan is described in both subparagraphs (A) and 
        (B).
          (2) Critical status.--A multiemployer plan is in 
        critical status for a plan year if, as determined by 
        the plan actuary under paragraph (3), the plan is 
        described in 1 or more of the following subparagraphs 
        as of the beginning of the plan year:
                  (A) A plan is described in this subparagraph 
                if--
                          (i) the funded percentage of the plan 
                        is less than 65 percent, and
                          (ii) the sum of--
                                  (I) the fair market value of 
                                plan assets, plus
                                  (II) the present value of the 
                                reasonably anticipated employer 
                                contributions for the current 
                                plan year and each of the 6 
                                succeeding plan years, assuming 
                                that the terms of all 
                                collective bargaining 
                                agreements pursuant to which 
                                the plan is maintained for the 
                                current plan year continue in 
                                effect for succeeding plan 
                                years,
                 is less than the present value of all 
                nonforfeitable benefits projected to be payable 
                under the plan during the current plan year and 
                each of the 6 succeeding plan years (plus 
                administrative expenses for such plan years).
                  (B) A plan is described in this subparagraph 
                if--
                          (i) the plan has an accumulated 
                        funding deficiency for the current plan 
                        year, not taking into account any 
                        extension of amortization periods under 
                        section 431(d), or
                          (ii) the plan is projected to have an 
                        accumulated funding deficiency for any 
                        of the 3 succeeding plan years (4 
                        succeeding plan years if the funded 
                        percentage of the plan is 65 percent or 
                        less), not taking into account any 
                        extension of amortization periods under 
                        section 431(d).
                  (C) A plan is described in this subparagraph 
                if--
                          (i)(I) the plan's normal cost for the 
                        current plan year, plus interest 
                        (determined at the rate used for 
                        determining costs under the plan) for 
                        the current plan year on the amount of 
                        unfunded benefit liabilities under the 
                        plan as of the last date of the 
                        preceding plan year, exceeds
                          (II) the present value of the 
                        reasonably anticipated employer and 
                        employee contributions for the current 
                        plan year,
                          (ii) the present value, as of the 
                        beginning of the current plan year, of 
                        nonforfeitable benefits of inactive 
                        participants is greater than the 
                        present value of nonforfeitable 
                        benefits of active participants, and
                          (iii) the plan has an accumulated 
                        funding deficiency for the current plan 
                        year, or is projected to have such a 
                        deficiency for any of the 4 succeeding 
                        plan years, not taking into account any 
                        extension of amortization periods under 
                        section 431(d).
                  (D) A plan is described in this subparagraph 
                if the sum of--
                          (i) the fair market value of plan 
                        assets, plus
                          (ii) the present value of the 
                        reasonably anticipated employer 
                        contributions for the current plan year 
                        and each of the 4 succeeding plan 
                        years, assuming that the terms of all 
                        collective bargaining agreements 
                        pursuant to which the plan is 
                        maintained for the current plan year 
                        continue in effect for succeeding plan 
                        years,
                is less than the present value of all benefits 
                projected to be payable under the plan during 
                the current plan year and each of the 4 
                succeeding plan years (plus administrative 
                expenses for such plan years).
          (3) Annual certification by plan actuary.--
                  (A) In general.--Not later than the 90th day 
                of each plan year of a multiemployer plan, the 
                plan actuary shall certify to the Secretary and 
                to the plan sponsor--
                          (i) whether or not the plan is in 
                        endangered status for such plan year, 
                        or would be in endangered status for 
                        such plan year but for paragraph (5), 
                        whether or not the plan is or will be 
                        in critical status for such plan year 
                        or for any of the succeeding 5 plan 
                        years, and whether or not the plan is 
                        or will be in critical and declining 
                        status for such plan year, and
                          (ii) in the case of a plan which is 
                        in a funding improvement or 
                        rehabilitation period, whether or not 
                        the plan is making the scheduled 
                        progress in meeting the requirements of 
                        its funding improvement or 
                        rehabilitation plan.
                  (B) Actuarial projections of assets and 
                liabilities.--
                          (i) In general.--Except as provided 
                        in clause (iv), in making the 
                        determinations and projections under 
                        this subsection, the plan actuary shall 
                        make projections required for the 
                        current and succeeding plan years of 
                        the current value of the assets of the 
                        plan and the present value of all 
                        liabilities to participants and 
                        beneficiaries under the plan for the 
                        current plan year as of the beginning 
                        of such year. The actuary's projections 
                        shall be based on reasonable actuarial 
                        estimates, assumptions, and methods 
                        that, except as provided in clause 
                        (iii), offer the actuary's best 
                        estimate of anticipated experience 
                        under the plan. The projected present 
                        value of liabilities as of the 
                        beginning of such year shall be 
                        determined based on the most recent of 
                        either--
                                  (I) the actuarial statement 
                                required under section 103(d) 
                                of the Employee Retirement 
                                Income Security Act of 1974 
                                with respect to the most 
                                recently filed annual report, 
                                or
                                  (II) the actuarial valuation 
                                for the preceding plan year.
                          (ii) Determinations of future 
                        contributions.--Any actuarial 
                        projection of plan assets shall 
                        assume--
                                  (I) reasonably anticipated 
                                employer contributions for the 
                                current and succeeding plan 
                                years, assuming that the terms 
                                of the one or more collective 
                                bargaining agreements pursuant 
                                to which the plan is maintained 
                                for the current plan year 
                                continue in effect for 
                                succeeding plan years, or
                                  (II) that employer 
                                contributions for the most 
                                recent plan year will continue 
                                indefinitely, but only if the 
                                plan actuary determines there 
                                have been no significant 
                                demographic changes that would 
                                make such assumption 
                                unreasonable.
                          (iii) 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, which shall act 
                        reasonably and in good faith.
                          (iv) Projections relating to critical 
                        status in succeeding plan years.--
                        Clauses (i) and (ii) (other than the 
                        2nd sentence of clause (i)) may be 
                        disregarded by a plan actuary in the 
                        case of any certification of whether a 
                        plan will be in critical status in a 
                        succeeding plan year, except that a 
                        plan sponsor may not elect to be in 
                        critical status for a plan year under 
                        paragraph (4) in any case in which the 
                        certification upon which such election 
                        would be based is made without regard 
                        to such clauses.
                          (v) Projections of critical and 
                        declining status.--In determining 
                        whether a plan is in critical and 
                        declining status as described in 
                        subsection (e)(9), clauses (i), (ii), 
                        and (iii) shall apply, except that--
                                  (I) if reasonable, the plan 
                                actuary shall assume that each 
                                contributing employer in 
                                compliance continues to comply 
                                through the end of the 
                                rehabilitation period or such 
                                later time as provided in 
                                subsection (e)(3)(A)(ii) with 
                                the terms of the rehabilitation 
                                plan that correspond to the 
                                schedule adopted or imposed 
                                under subsection (e), and
                                  (II) the plan actuary shall 
                                take into account any 
                                suspensions of benefits 
                                described in subsection (e)(9) 
                                adopted in a prior plan year 
                                that are still in effect.
                  (C) Penalty for failure to secure timely 
                actuarial certification.--Any failure of the 
                plan's actuary to certify the plan's status 
                under this subsection by the date specified in 
                subparagraph (A) shall be treated for purposes 
                of section 502(c)(2) of the Employee Retirement 
                Income Security Act of 1974 as a failure or 
                refusal by the plan administrator to file the 
                annual report required to be filed with the 
                Secretary under section 101(b)(1) of such Act.
                  (D) Notice.--
                          (i) In general.--In any case in which 
                        it is certified under subparagraph (A) 
                        that a multiemployer plan is or will be 
                        in endangered or critical status for a 
                        plan year or in which a plan sponsor 
                        elects to be in critical status for a 
                        plan year under paragraph (4), the plan 
                        sponsor shall, not later than 30 days 
                        after the date of the certification, 
                        provide notification of the endangered 
                        or critical status to the participants 
                        and beneficiaries, the bargaining 
                        parties, the Pension Benefit Guaranty 
                        Corporation, and the Secretary of 
                        Labor. In any case in which a plan 
                        sponsor elects to be in critical status 
                        for a plan year under paragraph (4), 
                        the plan sponsor shall notify the 
                        Secretary of such election not later 
                        than 30 days after the date of such 
                        certification or such other time as the 
                        Secretary may prescribe by regulations 
                        or other guidance.
                          (ii) Plans in critical status.--If it 
                        is certified under subparagraph (A) 
                        that a multiemployer plan is or will be 
                        in critical status, the plan sponsor 
                        shall include in the notice under 
                        clause (i) an explanation of the 
                        possibility that--
                                  (I) adjustable benefits (as 
                                defined in subsection (e)(8)) 
                                may be reduced, and
                                  (II) such reductions may 
                                apply to participants and 
                                beneficiaries whose benefit 
                                commencement date is on or 
                                after the date such notice is 
                                provided for the first plan 
                                year in which the plan is in 
                                critical status.
                          (iii) In the case of a multiemployer 
                        plan that would be in endangered status 
                        but for paragraph (5), the plan sponsor 
                        shall provide notice to the bargaining 
                        parties and the Pension Benefit 
                        Guaranty Corporation that the plan 
                        would be in endangered status but for 
                        such paragraph.
                          (iv) Model notice.--The Secretary, in 
                        consultation with the Secretary of 
                        Labor, shall prescribe a model notice 
                        that a multiemployer plan may use to 
                        satisfy the requirements under clauses 
                        (ii) and (iii).
                          (v) Notice of projection to be in 
                        critical 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 
                        critical status for any of 5 succeeding 
                        plan years (but not for the current 
                        plan year) and the plan sponsor of such 
                        plan has not made an election to be in 
                        critical status for the plan year under 
                        paragraph (4), the plan sponsor shall, 
                        not later than 30 days after the date 
                        of the certification, provide 
                        notification of the projected critical 
                        status to the Pension Benefit Guaranty 
                        Corporation.
          (4) Election to be in critical status.--
        Notwithstanding paragraph (2) and subject to paragraph 
        (3)(B)(iv)--
                  (A) the plan sponsor of a multiemployer plan 
                that is not in critical status for a plan year 
                but that is projected by the plan actuary, 
                pursuant to the determination under paragraph 
                (3), to be in critical status in any of the 
                succeeding 5 plan years may, not later than 30 
                days after the date of the certification under 
                paragraph (3)(A), elect to be in critical 
                status effective for the current plan year,
                  (B) the plan year in which the plan sponsor 
                elects to be in critical status under 
                subparagraph (A) shall be treated for purposes 
                of this section as the first year in which the 
                plan is in critical status, regardless of the 
                date on which the plan first satisfies the 
                criteria for critical status under paragraph 
                (2), and
                  (C) a plan that is in critical status under 
                this paragraph shall not emerge from critical 
                status except in accordance with subsection 
                (e)(4)(B).
          (5) Special rule.--A plan is described in this 
        paragraph if--
                  (A) as part of the actuarial certification of 
                endangered status under paragraph (3)(A) for 
                the plan year, the plan actuary certifies that 
                the plan is projected to no longer be described 
                in either paragraph (1)(A) or paragraph (1)(B) 
                as of the end of the tenth plan year ending 
                after the plan year to which the certification 
                relates, and
                  (B) the plan was not in critical or 
                endangered status for the immediately preceding 
                plan year.
          (6) Critical and declining status.--For purposes of 
        this section, a plan in critical status shall be 
        treated as in critical and declining status if the plan 
        is described in one or more of subparagraphs (A), (B), 
        (C), and (D) of paragraph (2) and the plan is projected 
        to become insolvent within the meaning of section 418E 
        during the current plan year or any of the 14 
        succeeding plan years (19 succeeding plan years if the 
        plan has a ratio of inactive participants to active 
        participants that exceeds 2 to 1 or if the funded 
        percentage of the plan is less than 80 percent).
  (c) Funding improvement plan must be adopted for 
multiemployer plans in endangered status.--
          (1) In general.--In any case in which a multiemployer 
        plan is in endangered status for a plan year, the plan 
        sponsor, in accordance with this subsection--
                  (A) shall adopt a funding improvement plan 
                not later than 240 days following the required 
                date for the actuarial certification of 
                endangered status under subsection (b)(3)(A), 
                and
                  (B) within 30 days after the adoption of the 
                funding improvement plan--
                          (i) 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 applicable benchmarks 
                        in accordance with the funding 
                        improvement plan, including--
                                  (I) one proposal for 
                                reductions in the amount of 
                                future benefit accruals 
                                necessary to achieve the 
                                applicable benchmarks, assuming 
                                no amendments increasing 
                                contributions under the plan 
                                (other than amendments 
                                increasing contributions 
                                necessary to achieve the 
                                applicable benchmarks after 
                                amendments have reduced future 
                                benefit accruals to the maximum 
                                extent permitted by law), and
                                  (II) one proposal for 
                                increases in contributions 
                                under the plan necessary to 
                                achieve the applicable 
                                benchmarks, assuming no 
                                amendments reducing future 
                                benefit accruals under the 
                                plan, and
                          (ii) may, if the plan sponsor deems 
                        appropriate, prepare and provide the 
                        bargaining parties with additional 
                        information relating to contribution 
                        rates or benefit reductions, 
                        alternative schedules, or other 
                        information relevant to achieving the 
                        applicable benchmarks in accordance 
                        with the funding improvement plan.
                For purposes of this section, the term 
                ``applicable benchmarks'' means the 
                requirements applicable to the multiemployer 
                plan under paragraph (3) (as modified by 
                paragraph (5)).
          (2) Exception for years after process begins.--
        Paragraph (1) shall not apply to a plan year if such 
        year is in a funding plan adoption period or funding 
        improvement period by reason of the plan being in 
        endangered status for a preceding plan year. For 
        purposes of this section, such preceding plan year 
        shall be the initial determination year with respect to 
        the funding improvement plan to which it relates.
          (3) Funding improvement plan.--For purposes of this 
        section--
                  (A) In general.--A funding improvement plan 
                is a plan which consists of the actions, 
                including options or a range of options to be 
                proposed to the bargaining parties, formulated 
                to provide, based on reasonably anticipated 
                experience and reasonable actuarial 
                assumptions, for the attainment by the plan 
                during the funding improvement period of the 
                following requirements:
                          (i) Increase in plan's funding 
                        percentage.--The plan's funded 
                        percentage as of the close of the 
                        funding improvement period equals or 
                        exceeds a percentage equal to the sum 
                        of--
                                  (I) such percentage as of the 
                                beginning of the first plan 
                                year for which the plan is 
                                certified to be in endangered 
                                status pursuant to paragraph 
                                (b)(3), plus
                                  (II) 33 percent of the 
                                difference between 100 percent 
                                and the percentage under 
                                subclause (I).
                          (ii) Avoidance of accumulated funding 
                        deficiencies.--No accumulated funding 
                        deficiency for the last plan year 
                        during the funding improvement period 
                        (taking into account any extension of 
                        amortization periods under section 
                        431(d)).
                  (B) Seriously endangered plans.--In the case 
                of a plan in seriously endangered status, 
                except as provided in paragraph (5), 
                subparagraph (A)(i)(II) shall be applied by 
                substituting ``20 percent'' for ``33 percent''.
          (4) Funding improvement period.--For purposes of this 
        section--
                  (A) In general.--The funding improvement 
                period for any funding improvement plan adopted 
                pursuant to this subsection is the 10-year 
                period 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 funding 
                        improvement plan, or
                          (ii) the expiration of the collective 
                        bargaining agreements in effect on the 
                        due date for the actuarial 
                        certification of endangered status for 
                        the initial determination year under 
                        subsection (b)(3)(A) and covering, as 
                        of such due date, at least 75 percent 
                        of the active participants in such 
                        multiemployer plan.
                  (B) Seriously endangered plans.--In the case 
                of a plan in seriously endangered status, 
                except as provided in paragraph (5), 
                subparagraph (A) shall be applied by 
                substituting ``15-year period'' for ``10-year 
                period''.
                  (C) Coordination with changes in status.--
                          (i) Plans no longer in endangered 
                        status.--If the plan's actuary 
                        certifies under subsection (b)(3)(A) 
                        for a plan year in any funding plan 
                        adoption period or funding improvement 
                        period that the plan is no longer in 
                        endangered status and is not in 
                        critical status, the funding plan 
                        adoption period or funding improvement 
                        period, whichever is applicable, shall 
                        end as of the close of the preceding 
                        plan year.
                          (ii) Plans in critical status.--If 
                        the plan's actuary certifies under 
                        subsection (b)(3)(A) for a plan year in 
                        any funding plan adoption period or 
                        funding improvement period that the 
                        plan is in critical status, the funding 
                        plan adoption period or funding 
                        improvement period, whichever is 
                        applicable, shall end as of the close 
                        of the plan year preceding the first 
                        plan year in the rehabilitation period 
                        with respect to such status.
                  (D) Plans in endangered status at end of 
                period.--If the plan's actuary certifies under 
                subsection (b)(3)(A) for the first plan year 
                following the close of the period described in 
                subparagraph (A) that the plan is in endangered 
                status, the provisions of this subsection and 
                subsection (d) shall be applied as if such 
                first plan year were an initial determination 
                year, except that the plan may not be amended 
                in a manner inconsistent with the funding 
                improvement plan in effect for the preceding 
                plan year until a new funding improvement plan 
                is adopted.
          (5) Special rules for seriously endangered plans more 
        than 70 percent funded.--
                  (A) In general.--If the funded percentage of 
                a plan in seriously endangered status was more 
                than 70 percent as of the beginning of the 
                initial determination year--
                          (i) paragraphs (3)(B) and (4)(B) 
                        shall apply only if the plan's actuary 
                        certifies, within 30 days after the 
                        certification under subsection 
                        (b)(3)(A) for the initial determination 
                        year, that, based on the terms of the 
                        plan and the collective bargaining 
                        agreements in effect at the time of 
                        such certification, the plan is not 
                        projected to meet the requirements of 
                        paragraph (3)(A) (without regard to 
                        paragraphs (3)(B) and (4)(B)), and
                          (ii) if there is a certification 
                        under clause (i), the plan may, in 
                        formulating its funding improvement 
                        plan, only take into account the rules 
                        of paragraph (3)(B) and (4)(B) for plan 
                        years in the funding improvement period 
                        beginning on or before the date on 
                        which the last of the collective 
                        bargaining agreements described in 
                        paragraph (4)(A)(ii) expires.
                  (B) Special rule after expiration of 
                agreements.--Notwithstanding subparagraph 
                (A)(ii), if, for any plan year ending after the 
                date described in subparagraph (A)(ii), the 
                plan actuary certifies (at the time of the 
                annual certification under subsection (b)(3)(A) 
                for such plan year) that, based on the terms of 
                the plan and collective bargaining agreements 
                in effect at the time of that annual 
                certification, the plan is not projected to be 
                able to meet the requirements of paragraph 
                (3)(A) (without regard to paragraphs (3)(B) and 
                (4)(B)), paragraphs (3)(B) and (4)(B) shall 
                continue to apply for such year.
          (6) Updates to funding improvement plans and 
        schedules.--
                  (A) Funding improvement plan.--The plan 
                sponsor shall annually update the funding 
                improvement 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.
          (7) Imposition of schedule where failure to adopt 
        funding improvement 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 endangered 
                        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 funding 
                        improvement plan and a schedule from 
                        the plan sponsor,
                the plan sponsor shall implement the schedule 
                described in paragraph (1)(B)(i)(I) beginning 
                on the date specified in subparagraph (C).
                  (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 funding improvement plan 
                        (or imposed under subparagraph (A)) 
                        expires while the plan is still in 
                        endangered status, and
                          (ii) after receiving one or more 
                        updated schedules from the plan sponsor 
                        under paragraph (6)(B), the bargaining 
                        parties with respect to such agreement 
                        fail to adopt a contribution schedule 
                        with terms consistent with the updated 
                        funding improvement plan and a schedule 
                        from the plan sponsor,
                then the contribution schedule applicable under 
                the expired collective bargaining agreement, as 
                updated and in effect on the date the 
                collective bargaining agreement expires, shall 
                be implemented by the plan sponsor beginning on 
                the date specified in subparagraph (C).
                  (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.
          (8) Funding plan adoption period.--For purposes of 
        this section, the term ``funding plan adoption period'' 
        means the period beginning on the date of the 
        certification under subsection (b)(3)(A) for the 
        initial determination year and ending on the day before 
        the first day of the funding improvement period.
  (d) Rules for operation of plan during adoption and 
improvement periods.--
          (1) Compliance with funding improvement plan.--
                  (A) In general.--A plan may not be amended 
                after the date of the adoption of a funding 
                improvement plan under subsection (c) so as to 
                be inconsistent with the funding improvement 
                plan.
                  (B) Special rules for benefit increases.--A 
                plan may not be amended after the date of the 
                adoption of a funding improvement plan under 
                subsection (c) so as to increase benefits, 
                including future benefit accruals, unless the 
                plan actuary certifies that such increase is 
                paid for out of additional contributions not 
                contemplated by the funding improvement plan, 
                and, after taking into account the benefit 
                increase, the multiemployer plan still is 
                reasonably expected to meet the applicable 
                benchmark on the schedule contemplated in the 
                funding improvement plan.
          (2) Special rules for plan adoption period.--During 
        the period beginning on the date of the certification 
        under subsection (b)(3)(A) for the initial 
        determination year and ending on the date of the 
        adoption of a funding improvement 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, and
                  (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.
  (e) Rehabilitation plan must be adopted for multiemployer 
plans in critical status.--
          (1) In general.--In any case in which a multiemployer 
        plan is in critical status for a plan year, the plan 
        sponsor, in accordance with this subsection--
                  (A) shall adopt a rehabilitation plan not 
                later than 240 days following the required date 
                for the actuarial certification of critical 
                status under subsection (b)(3)(A), and
                  (B) within 30 days after the adoption of the 
                rehabilitation plan--
                          (i) 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 emerge from critical status in 
                        accordance with the rehabilitation 
                        plan, and
                          (ii) may, if the plan sponsor deems 
                        appropriate, prepare and provide the 
                        bargaining parties with additional 
                        information relating to contribution 
                        rates or benefit reductions, 
                        alternative schedules, or other 
                        information relevant to emerging from 
                        critical status in accordance with the 
                        rehabilitation plan.
        The schedule or schedules described in subparagraph 
        (B)(i) shall reflect reductions in future benefit 
        accruals and adjustable benefits, and increases in 
        contributions, that the plan sponsor determines are 
        reasonably necessary to emerge from critical status. 
        One schedule shall be designated as the default 
        schedule and such schedule shall assume that there are 
        no increases in contributions under the plan other than 
        the increases necessary to emerge from critical status 
        after future benefit accruals and other benefits (other 
        than benefits the reduction or elimination of which are 
        not permitted under section 411(d)(6)) have been 
        reduced to the maximum extent permitted by law.
          (2) Exception for years after process begins.--
        Paragraph (1) shall not apply to a plan year if such 
        year is in a rehabilitation plan adoption period or 
        rehabilitation period by reason of the plan being in 
        critical status for a preceding plan year. For purposes 
        of this section, such preceding plan year shall be the 
        initial critical year with respect to the 
        rehabilitation plan to which it relates.
          (3) Rehabilitation plan.--For purposes of this 
        section--
                  (A) In general.--A rehabilitation plan is a 
                plan which consists of--
                          (i) 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 cease to be in 
                        critical status by the end of the 
                        rehabilitation period and may include 
                        reductions in plan expenditures 
                        (including plan mergers and 
                        consolidations), reductions in future 
                        benefit accruals or increases in 
                        contributions, if agreed to by the 
                        bargaining parties, or any combination 
                        of such actions, or
                          (ii) if the plan sponsor determines 
                        that, based on reasonable actuarial 
                        assumptions and upon exhaustion of all 
                        reasonable measures, the plan can not 
                        reasonably be expected to emerge from 
                        critical status by the end of the 
                        rehabilitation period, reasonable 
                        measures to emerge from critical status 
                        at a later time or to forestall 
                        possible insolvency (within the meaning 
                        of section 4245 of the Employee 
                        Retirement Income Security Act of 
                        1974).
                A rehabilitation plan must provide annual 
                standards for meeting the requirements of such 
                rehabilitation plan. Such plan shall also 
                include the schedules required to be provided 
                under paragraph (1)(B)(i) and if clause (ii) 
                applies, shall set forth the alternatives 
                considered, explain why the plan is not 
                reasonably expected to emerge from critical 
                status by the end of the rehabilitation period, 
                and specify when, if ever, the plan is expected 
                to emerge from critical status in accordance 
                with the rehabilitation plan.
                  (B) Updates to rehabilitation plan and 
                schedules.--
                          (i) Rehabilitation plan.--The plan 
                        sponsor shall annually update the 
                        rehabilitation plan and shall file the 
                        update with the plan's annual report 
                        under section 104 of the Employee 
                        Retirement Income Security Act of 1974.
                          (ii) Schedules.--The plan sponsor 
                        shall annually update any schedule of 
                        contribution rates provided under this 
                        subsection to reflect the experience of 
                        the plan.
                          (iii) 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.
                  (C) Imposition of schedule where failure to 
                adopt rehabilitation plan.--
                          (i) 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 critical 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 rehabilitation plan 
                                and a schedule from the plan 
                                sponsor under paragraph 
                                (1)(B)(i),
                 the plan sponsor shall implement the schedule 
                described in the last sentence of paragraph (1) 
                beginning on the date specified in clause 
                (iii).
                          (ii) 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 rehabilitation 
                                plan (or imposed under 
                                subparagraph (C)(i)) expires 
                                while the plan is still in 
                                critical status, and
                                  (II) after receiving one or 
                                more updated schedules from the 
                                plan sponsor under subparagraph 
                                (B)(ii), the bargaining parties 
                                with respect to such agreement 
                                fail to adopt a contribution 
                                schedule with terms consistent 
                                with the updated rehabilitation 
                                plan and a schedule from the 
                                plan sponsor,
                 then the contribution schedule applicable 
                under the expired collective bargaining 
                agreement, as updated and in effect on the date 
                the collective bargaining agreement expires, 
                shall be implemented by the plan sponsor 
                beginning on the date specified in clause 
                (iii).
                          (iii) 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 clause (ii) or 
                        (iii) expires.
          (4) Rehabilitation period.--For purposes of this 
        section--
                  (A) In general.--The rehabilitation period 
                for a plan in critical status is the 10-year 
                period beginning on the first day of the first 
                plan year of the multiemployer plan following 
                the earlier of--
                          (i) the second anniversary of the 
                        date of the adoption of the 
                        rehabilitation plan, or
                          (ii) the expiration of the collective 
                        bargaining agreements in effect on the 
                        due date for the actuarial 
                        certification of critical status for 
                        the initial critical year under 
                        subsection (a)(1) and covering, as of 
                        such date at least 75 percent of the 
                        active participants in such 
                        multiemployer plan.
                If a plan emerges from critical status as 
                provided under subparagraph (B) before the end 
                of such 10-year period, the rehabilitation 
                period shall end with the plan year preceding 
                the plan year for which the determination under 
                subparagraph (B) is made.
                  (B) Emergence.--
                          (i) In general.--A plan in critical 
                        status shall remain in such status 
                        until a plan year for which the plan 
                        actuary certifies, in accordance with 
                        subsection (b)(3)(A), that--
                                  (I) the plan is not described 
                                in one or more of the 
                                subparagraphs in subsection 
                                (b)(2) as of the beginning of 
                                the plan year,
                                  (II) the plan is not 
                                projected to have an 
                                accumulated funding deficiency 
                                for the plan year or any of the 
                                9 succeeding plan years, 
                                without regard to the use of 
                                the shortfall method but taking 
                                into account any extension of 
                                amortization periods under 
                                section 431(d)(2) or section 
                                412(e) (as in effect prior to 
                                the enactment of the Pension 
                                Protection Act of 2006), and
                                  (III) the plan is not 
                                projected to become insolvent 
                                within the meaning of section 
                                418E for any of the 30 
                                succeeding plan years.
                          (ii) Plans with certain amortization 
                        extensions.--
                                  (I) Special emergence rule.--
                                Notwithstanding clause (i), a 
                                plan in critical status that 
                                has an automatic extension of 
                                amortization periods under 
                                section 431(d)(1) shall no 
                                longer be in critical status if 
                                the plan actuary certifies for 
                                a plan year, in accordance with 
                                subsection (b)(3)(A), that--
                                          (aa) the plan is not 
                                        projected to have an 
                                        accumulated funding 
                                        deficiency for the plan 
                                        year or any of the 9 
                                        succeeding plan years, 
                                        without regard to the 
                                        use of the shortfall 
                                        method but taking into 
                                        account any extension 
                                        of amortization periods 
                                        under section 
                                        431(d)(1), and
                                          (bb) the plan is not 
                                        projected to become 
                                        insolvent within the 
                                        meaning of section 418E 
                                        for any of the 30 
                                        succeeding plan years,
                                 regardless of whether the plan 
                                is described in one or more of 
                                the subparagraphs in subsection 
                                (b)(2) as of the beginning of 
                                the plan year.
                                  (II) Reentry into critical 
                                status.--A plan that emerges 
                                from critical status under 
                                subclause (I) shall not reenter 
                                critical status for any 
                                subsequent plan year unless--
                                          (aa) the plan is 
                                        projected to have an 
                                        accumulated funding 
                                        deficiency for the plan 
                                        year or any of the 9 
                                        succeeding plan years, 
                                        without regard to the 
                                        use of the shortfall 
                                        method but taking into 
                                        account any extension 
                                        of amortization periods 
                                        under section 431(d), 
                                        or
                                          (bb) the plan is 
                                        projected to become 
                                        insolvent within the 
                                        meaning of section 418E 
                                        for any of the 30 
                                        succeeding plan years.
          (5) Rehabilitation plan adoption period.--For 
        purposes of this section, the term ``rehabilitation 
        plan adoption period'' means the period beginning on 
        the date of the certification under subsection 
        (b)(3)(A) for the initial critical year and ending on 
        the day before the first day of the rehabilitation 
        period.
          (6) Limitation on reduction in rates of future 
        accruals.--Any reduction in the rate of future accruals 
        under the default schedule described in the last 
        sentence of paragraph (1) shall not reduce the rate of 
        future accruals below--
                  (A) a monthly benefit (payable as a single 
                life annuity commencing at the participant's 
                normal retirement age) equal to 1 percent of 
                the contributions required to be made with 
                respect to a participant, or the equivalent 
                standard accrual rate for a participant or 
                group of participants under the collective 
                bargaining agreements in effect as of the first 
                day of the initial critical year, or
                  (B) if lower, the accrual rate under the plan 
                on such first day.
        The equivalent standard accrual rate shall be 
        determined by the plan sponsor based on the standard or 
        average contribution base units which the plan sponsor 
        determines to be representative for active participants 
        and such other factors as the plan sponsor determines 
        to be relevant. Nothing in this paragraph shall be 
        construed as limiting the ability of the plan sponsor 
        to prepare and provide the bargaining parties with 
        alternative schedules to the default schedule that 
        establish lower or higher accrual and contribution 
        rates than the rates otherwise described in this 
        paragraph.
          (7) Automatic employer surcharge.--
                  (A) Imposition of surcharge.--Each employer 
                otherwise obligated to make a contribution for 
                the initial critical year shall be obligated to 
                pay to the plan for such year a surcharge equal 
                to 5 percent of the contribution otherwise 
                required under the applicable collective 
                bargaining agreement (or other agreement 
                pursuant to which the employer contributes). 
                For each succeeding plan year in which the plan 
                is in critical status for a consecutive period 
                of years beginning with the initial critical 
                year, the surcharge shall be 10 percent of the 
                contribution otherwise so required.
                  (B) Enforcement of surcharge.--The surcharges 
                under subparagraph (A) shall be due and payable 
                on the same schedule as the contributions on 
                which the surcharges are based. Any failure to 
                make a surcharge payment shall be treated as a 
                delinquent contribution under section 515 of 
                the Employee Retirement Income Security Act of 
                1974 and shall be enforceable as such.
                  (C) Surcharge to terminate upon collective 
                bargaining agreement renegotiation.--The 
                surcharge under this paragraph shall cease to 
                be effective with respect to employees covered 
                by a collective bargaining agreement (or other 
                agreement pursuant to which the employer 
                contributes), beginning on the effective date 
                of a collective bargaining agreement (or other 
                such agreement) that includes terms consistent 
                with a schedule presented by the plan sponsor 
                under paragraph (1)(B)(i), as modified under 
                subparagraph (B) of paragraph (3).
                  (D) Surcharge not to apply until employer 
                receives notice.--The surcharge under this 
                paragraph shall not apply to an employer until 
                30 days after the employer has been notified by 
                the plan sponsor that the plan is in critical 
                status and that the surcharge is in effect.
                  (E) Surcharge not to generate increased 
                benefit accruals.--Notwithstanding any 
                provision of a plan to the contrary, the amount 
                of any surcharge under this paragraph shall not 
                be the basis for any benefit accrual under the 
                plan.
          (8) Benefit adjustments.--
                  (A) Adjustable benefits.--
                          (i) In general.--Notwithstanding 
                        section 411(d)(6), the plan sponsor 
                        shall, subject to the notice 
                        requirement under subparagraph (C), 
                        make any reductions to adjustable 
                        benefits which the plan sponsor deems 
                        appropriate, based upon the outcome of 
                        collective bargaining over the schedule 
                        or schedules provided under paragraph 
                        (1)(B)(i).
                          (ii) Exception for retirees.--Except 
                        in the case of adjustable benefits 
                        described in clause (iv)(III), the plan 
                        sponsor of a plan in critical status 
                        shall not reduce adjustable benefits of 
                        any participant or beneficiary whose 
                        benefit commencement date is before the 
                        date on which the plan provides notice 
                        to the participant or beneficiary under 
                        subsection (b)(3)(D) for the initial 
                        critical year.
                          (iii) Plan sponsor flexibility.--The 
                        plan sponsor shall include in the 
                        schedules provided to the bargaining 
                        parties an allowance for funding the 
                        benefits of participants with respect 
                        to whom contributions are not currently 
                        required to be made, and shall reduce 
                        their benefits to the extent permitted 
                        under this title and considered 
                        appropriate by the plan sponsor based 
                        on the plan's then current overall 
                        funding status.
                          (iv) Adjustable benefit defined.--For 
                        purposes of this paragraph, the term 
                        ``adjustable benefit'' means--
                                  (I) benefits, rights, and 
                                features under the plan, 
                                including post-retirement death 
                                benefits, 60-month guarantees, 
                                disability benefits not yet in 
                                pay status, and similar 
                                benefits,
                                  (II) any early retirement 
                                benefit or retirement-type 
                                subsidy (within the meaning of 
                                section 411(d)(6)(B)(i)) and 
                                any benefit payment option 
                                (other than the qualified joint 
                                and survivor annuity), and
                                  (III) benefit increases that 
                                would not be eligible for a 
                                guarantee under section 4022A 
                                of the Employee Retirement 
                                Income Security Act of 1974 on 
                                the first day of initial 
                                critical year because the 
                                increases were adopted (or, if 
                                later, took effect) less than 
                                60 months before such first 
                                day.
                  (B) Normal retirement benefits protected.--
                Except as provided in subparagraph 
                (A)(iv)(III), nothing in this paragraph shall 
                be construed to permit a plan to reduce the 
                level of a participant's accrued benefit 
                payable at normal retirement age.
                  (C) Notice requirements.--
                          (i) In general.--No reduction may be 
                        made to adjustable benefits under 
                        subparagraph (A) unless notice of such 
                        reduction has been given at least 30 
                        days before the general effective date 
                        of such reduction for all participants 
                        and beneficiaries to--
                                  (I) plan participants and 
                                beneficiaries,
                                  (II) each employer who has an 
                                obligation to contribute 
                                (within the meaning of section 
                                4212(a) of the Employee 
                                Retirement Income Security Act 
                                of 1974) under the plan, and
                                  (III) each employee 
                                organization which, for 
                                purposes of collective 
                                bargaining, represents plan 
                                participants employed by such 
                                an employer.
                          (ii) Content of notice.--The notice 
                        under clause (i) shall contain--
                                  (I) sufficient information to 
                                enable participants and 
                                beneficiaries to understand the 
                                effect of any reduction on 
                                their benefits, including an 
                                estimate (on an annual or 
                                monthly basis) of any affected 
                                adjustable benefit that a 
                                participant or beneficiary 
                                would otherwise have been 
                                eligible for as of the general 
                                effective date described in 
                                clause (i), and
                                  (II) information as to the 
                                rights and remedies of plan 
                                participants and beneficiaries 
                                as well as how to contact the 
                                Department of Labor for further 
                                information and assistance 
                                where appropriate.
                          (iii) Form and manner.--Any notice 
                        under clause (i)--
                                  (I) shall be provided in a 
                                form and manner prescribed in 
                                regulations of the Secretary, 
                                in consultation with the 
                                Secretary of Labor,
                                  (II) shall be written in a 
                                manner so as to be understood 
                                by the average plan 
                                participant, and
                                  (III) may be provided in 
                                written, electronic, or other 
                                appropriate form to the extent 
                                such form is reasonably 
                                accessible to persons to whom 
                                the notice is required to be 
                                provided.
                 The Secretary shall in the regulations 
                prescribed under subclause (I) establish a 
                model notice that a plan sponsor may use to 
                meet the requirements of this subparagraph.
          (9) Benefit suspensions for multiemployer plans in 
        critical and declining status.--
                  (A) In general.--Notwithstanding section 
                411(d)(6) and subject to subparagraphs (B) 
                through (I), the plan sponsor of a plan in 
                critical and declining status may, by plan 
                amendment, suspend benefits which the sponsor 
                deems appropriate.
                  (B) Suspension of benefits.--
                          (i) Suspension of benefits defined.--
                        For purposes of this subsection, the 
                        term ``suspension of benefits'' means 
                        the temporary or permanent reduction of 
                        any current or future payment 
                        obligation of the plan to any 
                        participant or beneficiary under the 
                        plan, whether or not in pay status at 
                        the time of the suspension of benefits.
                          (ii) Length of suspensions.--Any 
                        suspension of benefits made under 
                        subparagraph (A) shall remain in effect 
                        until the earlier of when the plan 
                        sponsor provides benefit improvements 
                        in accordance with subparagraph (E) or 
                        the suspension of benefits expires by 
                        its own terms.
                          (iii) No liability.--The plan shall 
                        not be liable for any benefit payments 
                        not made as a result of a suspension of 
                        benefits under this paragraph.
                          (iv) Applicability.--For purposes of 
                        this paragraph, all references to 
                        suspensions of benefits, increases in 
                        benefits, or resumptions of suspended 
                        benefits with respect to participants 
                        shall also apply with respect to 
                        benefits of beneficiaries or 
                        alternative payees of participants.
                          (v) Retiree representative.--
                                  (I) In general.--In the case 
                                of a plan with 10,000 or more 
                                participants, not later than 60 
                                days prior to the plan sponsor 
                                submitting an application to 
                                suspend benefits, the plan 
                                sponsor shall select a 
                                participant of the plan in pay 
                                status to act as a retiree 
                                representative. The retiree 
                                representative shall advocate 
                                for the interests of the 
                                retired and deferred vested 
                                participants and beneficiaries 
                                of the plan throughout the 
                                suspension approval process.
                                  (II) Reasonable expenses from 
                                plan.--The plan shall provide 
                                for reasonable expenses by the 
                                retiree representative, 
                                including reasonable legal and 
                                actuarial support, commensurate 
                                with the plan's size and funded 
                                status.
                                  (III) Special rule relating 
                                to fiduciary status.--Duties 
                                performed pursuant to subclause 
                                (I) shall not be subject to 
                                section 4975. The preceding 
                                sentence shall not apply to 
                                those duties associated with an 
                                application to suspend benefits 
                                pursuant to subparagraph (G) 
                                that are performed by the 
                                retiree representative who is 
                                also a plan trustee.
                  (C) Conditions for suspensions.--The plan 
                sponsor of a plan in critical and declining 
                status for a plan year may suspend benefits 
                only if the following conditions are met:
                          (i) Taking into account the proposed 
                        suspensions of benefits (and, if 
                        applicable, a proposed partition of the 
                        plan under section 4233 of the Employee 
                        Retirement Income Security Act of 
                        1974), the plan actuary certifies that 
                        the plan is projected to avoid 
                        insolvency within the meaning of 
                        section 418E, assuming the suspensions 
                        of benefits continue until the 
                        suspensions of benefits expire by their 
                        own terms or if no such expiration date 
                        is set, indefinitely.
                          (ii) The plan sponsor determines, in 
                        a written record to be maintained 
                        throughout the period of the benefit 
                        suspension, that the plan is still 
                        projected to become insolvent unless 
                        benefits are suspended under this 
                        paragraph, although all reasonable 
                        measures to avoid insolvency have been 
                        taken (and continue to be taken during 
                        the period of the benefit suspension). 
                        In its determination, the plan sponsor 
                        may take into account factors including 
                        the following:
                                  (I) Current and past 
                                contribution levels.
                                  (II) Levels of benefit 
                                accruals (including any prior 
                                reductions in the rate of 
                                benefit accruals).
                                  (III) Prior reductions (if 
                                any) of adjustable benefits.
                                  (IV) Prior suspensions (if 
                                any) of benefits under this 
                                subsection.
                                  (V) The impact on plan 
                                solvency of the subsidies and 
                                ancillary benefits available to 
                                active participants.
                                  (VI) Compensation levels of 
                                active participants relative to 
                                employees in the participants' 
                                industry generally.
                                  (VII) Competitive and other 
                                economic factors facing 
                                contributing employers.
                                  (VIII) The impact of benefit 
                                and contribution levels on 
                                retaining active participants 
                                and bargaining groups under the 
                                plan.
                                  (IX) The impact of past and 
                                anticipated contribution 
                                increases under the plan on 
                                employer attrition and 
                                retention levels.
                                  (X) Measures undertaken by 
                                the plan sponsor to retain or 
                                attract contributing employers.
                  (D) Limitations on suspensions.--Any 
                suspensions of benefits made by a plan sponsor 
                pursuant to this paragraph shall be subject to 
                the following limitations:
                          (i) The monthly benefit of any 
                        participant or beneficiary may not be 
                        reduced below 110 percent of the 
                        monthly benefit which is guaranteed by 
                        the Pension Benefit Guaranty 
                        Corporation under section 4022A of the 
                        Employee Retirement Income Security Act 
                        of 1974 on the date of the suspension.
                          (ii)(I) In the case of a participant 
                        or beneficiary who has attained 75 
                        years of age as of the effective date 
                        of the suspension, not more than the 
                        applicable percentage of the maximum 
                        suspendable benefits of such 
                        participant or beneficiary may be 
                        suspended under this paragraph.
                          (II) For purposes of subclause (I), 
                        the maximum suspendable benefits of a 
                        participant or beneficiary is the 
                        portion of the benefits of such 
                        participant or beneficiary that would 
                        be suspended pursuant to this paragraph 
                        without regard to this clause;
                          (III) For purposes of subclause (I), 
                        the applicable percentage is a 
                        percentage equal to the quotient 
                        obtained by dividing--
                                  (aa) the number of months 
                                during the period beginning 
                                with the month after the month 
                                in which occurs the effective 
                                date of the suspension and 
                                ending with the month during 
                                which the participant or 
                                beneficiary attains the age of 
                                80, by
                                  (bb) 60 months.
                          (iii) No benefits based on disability 
                        (as defined under the plan) may be 
                        suspended under this paragraph.
                          (iv) Any suspensions of benefits, in 
                        the aggregate (and, if applicable, 
                        considered in combination with a 
                        partition of the plan under section 
                        4233 of the Employee Retirement Income 
                        Security Act of 1974), shall be 
                        reasonably estimated to achieve, but 
                        not materially exceed, the level that 
                        is necessary to avoid insolvency.
                          (v) In any case in which a suspension 
                        of benefits with respect to a plan is 
                        made in combination with a partition of 
                        the plan under section 4233 of the 
                        Employee Retirement Income Security Act 
                        of 1974, the suspension of benefits may 
                        not take effect prior to the effective 
                        date of such partition.
                          (vi) Any suspensions of benefits 
                        shall be equitably distributed across 
                        the participant and beneficiary 
                        population, taking into account 
                        factors, with respect to participants 
                        and beneficiaries and their benefits, 
                        that may include one or more of the 
                        following:
                                  (I) Age and life expectancy.
                                  (II) Length of time in pay 
                                status.
                                  (III) Amount of benefit.
                                  (IV) Type of benefit: 
                                survivor, normal retirement, 
                                early retirement.
                                  (V) Extent to which 
                                participant or beneficiary is 
                                receiving a subsidized benefit.
                                  (VI) Extent to which 
                                participant or beneficiary has 
                                received post-retirement 
                                benefit increases.
                                  (VII) History of benefit 
                                increases and reductions.
                                  (VIII) Years to retirement 
                                for active employees.
                                  (IX) Any discrepancies 
                                between active and retiree 
                                benefits.
                                  (X) Extent to which active 
                                participants are reasonably 
                                likely to withdraw support for 
                                the plan, accelerating employer 
                                withdrawals from the plan and 
                                increasing the risk of 
                                additional benefit reductions 
                                for participants in and out of 
                                pay status.
                                  (XI) Extent to which benefits 
                                are attributed to service with 
                                an employer that failed to pay 
                                its full withdrawal liability.
                          (vii) In the case of a plan that 
                        includes the benefits described in 
                        clause (III), benefits suspended under 
                        this paragraph shall--
                                  (I) first, be applied to the 
                                maximum extent permissible to 
                                benefits attributable to a 
                                participant's service for an 
                                employer which withdrew from 
                                the plan and failed to pay (or 
                                is delinquent with respect to 
                                paying) the full amount of its 
                                withdrawal liability under 
                                section 4201(b)(1) of the 
                                Employee Retirement Income 
                                Security Act of 1974 or an 
                                agreement with the plan,
                                  (II) second, except as 
                                provided by subclause (III), be 
                                applied to all other benefits 
                                that may be suspended under 
                                this paragraph, and
                                  (III) third, be applied to 
                                benefits under a plan that are 
                                directly attributable to a 
                                participant's service with any 
                                employer which has, prior to 
                                the date of enactment of the 
                                Multiemployer Pension Reform 
                                Act of 2014--
                                          (aa) withdrawn from 
                                        the plan in a complete 
                                        withdrawal under 
                                        section 4203 of the 
                                        Employee Retirement 
                                        Income Security Act of 
                                        1974 and has paid the 
                                        full amount of the 
                                        employer's withdrawal 
                                        liability under section 
                                        4201(b)(1) of such Act 
                                        or an agreement with 
                                        the plan, and
                                          (bb) pursuant to a 
                                        collective bargaining 
                                        agreement, assumed 
                                        liability for providing 
                                        benefits to 
                                        participants and 
                                        beneficiaries of the 
                                        plan under a separate, 
                                        single-employer plan 
                                        sponsored by the 
                                        employer, in an amount 
                                        equal to any amount of 
                                        benefits for such 
                                        participants and 
                                        beneficiaries reduced 
                                        as a result of the 
                                        financial status of the 
                                        plan.
                  (E) Benefit improvements.--
                          (i) In general.--The plan sponsor 
                        may, in its sole discretion, provide 
                        benefit improvements while any 
                        suspension of benefits under the plan 
                        remains in effect, except that the plan 
                        sponsor may not increase the 
                        liabilities of the plan by reason of 
                        any benefit improvement for any 
                        participant or beneficiary not in pay 
                        status by the first day of the plan 
                        year for which the benefit improvement 
                        takes effect, unless--
                                  (I) such action is 
                                accompanied by equitable 
                                benefit improvements in 
                                accordance with clause (ii) for 
                                all participants and 
                                beneficiaries whose benefit 
                                commencement dates were before 
                                the first day of the plan year 
                                for which the benefit 
                                improvement for such 
                                participant or beneficiary not 
                                in pay status took effect; and
                                  (II) the plan actuary 
                                certifies that after taking 
                                into account such benefits 
                                improvements the plan is 
                                projected to avoid insolvency 
                                indefinitely under section 
                                418E.
                          (ii) Equitable distribution of 
                        benefit improvements.--
                                  (I) Limitation.--The 
                                projected value of the total 
                                liabilities for benefit 
                                improvements for participants 
                                and beneficiaries not in pay 
                                status by the date of the first 
                                day of the plan year in which 
                                the benefit improvements are 
                                proposed to take effect, as 
                                determined as of such date, may 
                                not exceed the projected value 
                                of the liabilities arising from 
                                benefit improvements for 
                                participants and beneficiaries 
                                with benefit commencement dates 
                                prior to the first day of such 
                                plan year, as so determined.
                                  (II) Equitable distribution 
                                of benefits.--The plan sponsor 
                                shall equitably distribute any 
                                increase in total liabilities 
                                for benefit improvements in 
                                clause (i) to some or all of 
                                the participants and 
                                beneficiaries whose benefit 
                                commencement date is before the 
                                date of the first day of the 
                                plan year in which the benefit 
                                improvements are proposed to 
                                take effect, taking into 
                                account the relevant factors 
                                described in subparagraph 
                                (D)(vi) and the extent to which 
                                the benefits of the 
                                participants and beneficiaries 
                                were suspended.
                          (iii) Special rule for resumptions of 
                        benefits only for participants in pay 
                        status.--The plan sponsor may increase 
                        liabilities of the plan through a 
                        resumption of benefits for participants 
                        and beneficiaries in pay status only if 
                        the plan sponsor equitably distributes 
                        the value of resumed benefits to some 
                        or all of the participants and 
                        beneficiaries in pay status, taking 
                        into account the relevant factors 
                        described in subparagraph (D)(vi).
                          (iv) Special rule for certain benefit 
                        increases.--This subparagraph shall not 
                        apply to a resumption of suspended 
                        benefits or plan amendment which 
                        increases liabilities with respect to 
                        participants and beneficiaries not in 
                        pay status by the first day of the plan 
                        year in which the benefit improvements 
                        took effect which--
                                  (I) the Secretary of the 
                                Treasury, in consultation with 
                                the Pension Benefit Guaranty 
                                Corporation and the Secretary 
                                of Labor, determines to be 
                                reasonable and which provides 
                                for only de minimis increases 
                                in the liabilities of the plan, 
                                or
                                  (II) is required as a 
                                condition of qualification 
                                under part I of subchapter D of 
                                chapter 1 of subtitle A or to 
                                comply with other applicable 
                                law, as determined by the 
                                Secretary of the Treasury.
                          (v) Additional limitations.--Except 
                        for resumptions of suspended benefits 
                        described in clause (iii), the 
                        limitations on benefit improvements 
                        while a suspension of benefits is in 
                        effect under this paragraph shall be in 
                        addition to any other applicable 
                        limitations on increases in benefits 
                        imposed on a plan.
                          (vi) Definition of benefit 
                        improvement.--For purposes of this 
                        subparagraph, the term ``benefit 
                        improvement'' means, with respect to a 
                        plan, a resumption of suspended 
                        benefits, an increase in benefits, an 
                        increase in the rate at which benefits 
                        accrue, or an increase in the rate at 
                        which benefits become nonforfeitable 
                        under the plan.
                  (F) Notice requirements.--
                          (i) In general.--No suspension of 
                        benefits may be made pursuant to this 
                        paragraph unless notice of such 
                        proposed suspension has been given by 
                        the plan sponsor concurrently with an 
                        application for approval of such 
                        suspension submitted under subparagraph 
                        (G) to the Secretary of the Treasury 
                        to--
                                  (I) such plan participants 
                                and beneficiaries who may be 
                                contacted by reasonable 
                                efforts,
                                  (II) each employer who has an 
                                obligation to contribute 
                                (within the meaning of section 
                                4212(a) of the Employee 
                                Retirement Income Security Act 
                                of 1974) under the plan, and
                                  (III) each employee 
                                organization which, for 
                                purposes of collective 
                                bargaining, represents plan 
                                participants employed by such 
                                an employer.
                          (ii) Content of notice.--The notice 
                        under clause (i) shall contain--
                                  (I) sufficient information to 
                                enable participants and 
                                beneficiaries to understand the 
                                effect of any suspensions of 
                                benefits, including an 
                                individualized estimate (on an 
                                annual or monthly basis) of 
                                such effect on each participant 
                                or beneficiary,
                                  (II) a description of the 
                                factors considered by the plan 
                                sponsor in designing the 
                                benefit suspensions,
                                  (III) a statement that the 
                                application for approval of any 
                                suspension of benefits shall be 
                                available on the website of the 
                                Department of the Treasury and 
                                that comments on such 
                                application will be accepted,
                                  (IV) information as to the 
                                rights and remedies of plan 
                                participants and beneficiaries,
                                  (V) if applicable, a 
                                statement describing the 
                                appointment of a retiree 
                                representative, the date of 
                                appointment of such 
                                representative, identifying 
                                information about the retiree 
                                representative (including 
                                whether the representative is a 
                                plan trustee), and how to 
                                contact such representative, 
                                and
                                  (VI) information on how to 
                                contact the Department of the 
                                Treasury for further 
                                information and assistance 
                                where appropriate.
                          (iii) Form and manner.--Any notice 
                        under clause (i)--
                                  (I) shall be provided in a 
                                form and manner prescribed in 
                                guidance by the Secretary of 
                                the Treasury, in consultation 
                                with the Pension Benefit 
                                Guaranty Corporation and the 
                                Secretary of Labor, 
                                notwithstanding any other 
                                provision of law,
                                  (II) shall be written in a 
                                manner so as to be understood 
                                by the average plan 
                                participant, and
                                  (III) may be provided in 
                                written, electronic, or other 
                                appropriate form to the extent 
                                such form is reasonably 
                                accessible to persons to whom 
                                the notice is required to be 
                                provided.
                          (iv) Other notice requirement.--Any 
                        notice provided under clause (i) shall 
                        fulfill the requirement for notice of a 
                        significant reduction in benefits 
                        described in section 4980F.
                          (v) Model notice.--The Secretary of 
                        the Treasury, in consultation with the 
                        Pension Benefit Guaranty Corporation 
                        and the Secretary of Labor, shall in 
                        the guidance prescribed under clause 
                        (iii)(I) establish a model notice that 
                        a plan sponsor may use to meet the 
                        requirements of this subparagraph.
                  (G) Approval process by the secretary of the 
                treasury in consultation with the pension 
                benefit guaranty corporation and the secretary 
                of labor.--
                          (i) In general.--The plan sponsor of 
                        a plan in critical and declining status 
                        for a plan year that seeks to suspend 
                        benefits must submit an application to 
                        the Secretary of the Treasury for 
                        approval of the suspensions of 
                        benefits. If the plan sponsor submits 
                        an application for approval of the 
                        suspensions, the Secretary of the 
                        Treasury shall approve, in consultation 
                        with the Pension Benefit Guaranty 
                        Corporation and the Secretary of Labor, 
                        the application upon finding that the 
                        plan is eligible for the suspensions 
                        and has satisfied the criteria of 
                        subparagraphs (C), (D), (E), and (F).
                          (ii) Solicitation of comments.--Not 
                        later than 30 days after receipt of the 
                        application under clause (i), the 
                        Secretary of the Treasury, in 
                        consultation with the Pension Benefit 
                        Guaranty Corporation and the Secretary 
                        of Labor, shall publish a notice in the 
                        Federal Register soliciting comments 
                        from contributing employers, employee 
                        organizations, and participants and 
                        beneficiaries of the plan for which an 
                        application was made and other 
                        interested parties. The application for 
                        approval of the suspension of benefits 
                        shall be published on the website of 
                        the Department of the Treasury.
                          (iii) Required action; deemed 
                        approval.--The Secretary of the 
                        Treasury, in consultation with the 
                        Pension Benefit Guaranty Corporation 
                        and the Secretary of Labor, shall 
                        approve or deny any application for 
                        suspensions of benefits under this 
                        paragraph within 225 days after the 
                        submission of such application. An 
                        application for suspension of benefits 
                        shall be deemed approved unless, within 
                        such 225 days, the Secretary of the 
                        Treasury notifies the plan sponsor that 
                        it has failed to satisfy one or more of 
                        the criteria described in this 
                        paragraph. If the Secretary of the 
                        Treasury, in consultation with the 
                        Pension Benefit Guaranty Corporation 
                        and the Secretary of Labor, rejects a 
                        plan sponsor's application, the 
                        Secretary of the Treasury shall provide 
                        notice to the plan sponsor detailing 
                        the specific reasons for the rejection, 
                        including reference to the specific 
                        requirement not satisfied. Approval or 
                        denial by the Secretary of the 
                        Treasury, in consultation with the 
                        Pension Benefit Guaranty Corporation 
                        and the Secretary of Labor, of an 
                        application shall be treated as final 
                        agency action for purposes of section 
                        704 of title 5, United States Code.
                          (iv) Agency review.--In evaluating 
                        whether the plan sponsor has met the 
                        criteria specified in clause (ii) of 
                        subparagraph (C), the Secretary of the 
                        Treasury, in consultation with the 
                        Pension Benefit Guaranty Corporation 
                        and the Secretary of Labor, shall 
                        review the plan sponsor's consideration 
                        of factors under such clause.
                          (v) Standard for accepting plan 
                        sponsor determinations.--In evaluating 
                        the plan sponsor's application, the 
                        Secretary of the Treasury shall accept 
                        the plan sponsor's determinations 
                        unless it concludes, in consultation 
                        with the Pension Benefit Guaranty 
                        Corporation and the Secretary of Labor, 
                        that the plan sponsor's determinations 
                        were clearly erroneous.
                  (H) Participant ratification process.--
                          (i) In general.--No suspension of 
                        benefits may take effect pursuant to 
                        this paragraph prior to a vote of the 
                        participants of the plan with respect 
                        to the suspension.
                          (ii) Administration of vote.--Not 
                        later than 30 days after approval of 
                        the suspension by the Secretary of the 
                        Treasury, in consultation with the 
                        Pension Benefit Guaranty Corporation 
                        and the Secretary of Labor, under 
                        subparagraph (G), the Secretary of the 
                        Treasury, in consultation with the 
                        Pension Benefit Guaranty Corporation 
                        and the Secretary of Labor, shall 
                        administer a vote of participants and 
                        beneficiaries of the plan. Except as 
                        provided in clause (v), the suspension 
                        shall go into effect following the vote 
                        unless a majority of all participants 
                        and beneficiaries of the plan vote to 
                        reject the suspension. The plan sponsor 
                        may submit a new suspension application 
                        to the Secretary of the Treasury for 
                        approval in any case in which a 
                        suspension is prohibited from taking 
                        effect pursuant to a vote under this 
                        subparagraph.
                          (iii) Ballots.--The plan sponsor 
                        shall provide a ballot for the vote 
                        (subject to approval by the Secretary 
                        of the Treasury, in consultation with 
                        the Pension Benefit Guaranty 
                        Corporation and the Secretary of Labor) 
                        that includes the following:
                                  (I) A statement from the plan 
                                sponsor in support of the 
                                suspension.
                                  (II) A statement in 
                                opposition to the suspension 
                                compiled from comments received 
                                pursuant to subparagraph 
                                (G)(ii).
                                  (III) A statement that the 
                                suspension has been approved by 
                                the Secretary of the Treasury, 
                                in consultation with the 
                                Pension Benefit Guaranty 
                                Corporation and the Secretary 
                                of Labor.
                                  (IV) A statement that the 
                                plan sponsor has determined 
                                that the plan will become 
                                insolvent unless the suspension 
                                takes effect.
                                  (V) A statement that 
                                insolvency of the plan could 
                                result in benefits lower than 
                                benefits paid under the 
                                suspension.
                                  (VI) A statement that 
                                insolvency of the Pension 
                                Benefit Guaranty Corporation 
                                would result in benefits lower 
                                than benefits paid in the case 
                                of plan insolvency.
                          (iv) Communication by plan sponsor.--
                        It is the sense of Congress that, 
                        depending on the size and resources of 
                        the plan and geographic distribution of 
                        the plan's participants, the plan 
                        sponsor should take such steps as may 
                        be necessary to inform participants 
                        about proposed benefit suspensions 
                        through in-person meetings, telephone 
                        or internet-based communications, 
                        mailed information, or by other means.
                          (v) Systemically important plans.--
                                  (I) In general.--Not later 
                                than 14 days after a vote under 
                                this subparagraph rejecting a 
                                suspension, the Secretary of 
                                the Treasury, in consultation 
                                with the Pension Benefit 
                                Guaranty Corporation and the 
                                Secretary of Labor, shall 
                                determine whether the plan is a 
                                systemically important plan. If 
                                the Secretary of the Treasury, 
                                in consultation with the 
                                Pension Benefit Guaranty 
                                Corporation and the Secretary 
                                of Labor, determines that the 
                                plan is a systemically 
                                important plan, not later than 
                                the end of the 90-day period 
                                beginning on the date the 
                                results of the vote are 
                                certified, the Secretary of the 
                                Treasury shall, notwithstanding 
                                such adverse vote--
                                          (aa) permit the 
                                        implementation of the 
                                        suspension proposed by 
                                        the plan sponsor; or
                                          (bb) permit the 
                                        implementation of a 
                                        modification by the 
                                        Secretary of the 
                                        Treasury, in 
                                        consultation with the 
                                        Pension Benefit 
                                        Guaranty Corporation 
                                        and the Secretary of 
                                        Labor, of such 
                                        suspension (so long as 
                                        the plan is projected 
                                        to avoid insolvency 
                                        within the meaning of 
                                        section 4245 of the 
                                        Employee Retirement 
                                        Income Security Act of 
                                        1974 under such 
                                        modification).
                                  (II) Recommendations.--Not 
                                later than 30 days after a 
                                determination by the Secretary 
                                of the Treasury, in 
                                consultation with the Pension 
                                Benefit Guaranty Corporation 
                                and the Secretary of Labor, 
                                that the plan is systemically 
                                important, the Participant and 
                                Plan Sponsor Advocate selected 
                                under section 4004 of the 
                                Employee Retirement Income 
                                Security Act of 1974 may submit 
                                recommendations to the 
                                Secretary of the Treasury with 
                                respect to the suspension or 
                                any revisions to the 
                                suspension.
                                  (III) Systemically important 
                                plan defined.--
                                          (aa) In general.--For 
                                        purposes of this 
                                        subparagraph, a 
                                        systemically important 
                                        plan is a plan with 
                                        respect to which the 
                                        Pension Benefit 
                                        Guaranty Corporation 
                                        projects the present 
                                        value of projected 
                                        financial assistance 
                                        payments exceeds 
                                        $1,000,000,000 if 
                                        suspensions are not 
                                        implemented.
                                          (bb) Indexing.--For 
                                        calendar years 
                                        beginning after 2015, 
                                        there shall be 
                                        substituted for the 
                                        dollar amount specified 
                                        in item (aa) an amount 
                                        equal to the product of 
                                        such dollar amount and 
                                        a fraction, the 
                                        numerator of which is 
                                        the contribution and 
                                        benefit base 
                                        (determined under 
                                        section 230 of the 
                                        Social Security Act) 
                                        for the preceding 
                                        calendar year and the 
                                        denominator of which is 
                                        such contribution and 
                                        benefit base for 
                                        calendar year 2014. If 
                                        the amount otherwise 
                                        determined under this 
                                        item is not a multiple 
                                        of $1,000,000, such 
                                        amount shall be rounded 
                                        to the next lowest 
                                        multiple of $1,000,000.
                          (vi) Final authorization to 
                        suspend.--In any case in which a 
                        suspension goes into effect following a 
                        vote pursuant to clause (ii) (or 
                        following a determination under clause 
                        (v) that the plan is a systemically 
                        important plan), the Secretary of the 
                        Treasury, in consultation with the 
                        Pension Benefit Guaranty Corporation 
                        and the Secretary of Labor, shall issue 
                        a final authorization to suspend with 
                        respect to the suspension not later 
                        than 7 days after such vote (or, in the 
                        case of a suspension that goes into 
                        effect under clause (v), at a time 
                        sufficient to allow the implementation 
                        of the suspension prior to the end of 
                        the 90-day period described in clause 
                        (v)(I)).
                  (I) Judicial review.--
                          (i) Denial of application.--An action 
                        by the plan sponsor challenging the 
                        denial of an application for suspension 
                        of benefits by the Secretary of the 
                        Treasury, in consultation with the 
                        Pension Benefit Guaranty Corporation 
                        and the Secretary of Labor, may only be 
                        brought following such denial.
                          (ii) Approval of suspension of 
                        benefits.--
                                  (I) Timing of action.--An 
                                action challenging a suspension 
                                of benefits under this 
                                paragraph may only be brought 
                                following a final authorization 
                                to suspend by the Secretary of 
                                the Treasury, in consultation 
                                with the Pension Benefit 
                                Guaranty Corporation and the 
                                Secretary of Labor, under 
                                subparagraph (H)(vi).
                                  (II) Standards of review.--
                                          (aa) In general.--A 
                                        court shall review an 
                                        action challenging a 
                                        suspension of benefits 
                                        under this paragraph in 
                                        accordance with section 
                                        706 of title 5, United 
                                        States Code.
                                          (bb) Temporary 
                                        injunction.--A court 
                                        reviewing an action 
                                        challenging a 
                                        suspension of benefits 
                                        under this paragraph 
                                        may not grant a 
                                        temporary injunction 
                                        with respect to such 
                                        suspension unless the 
                                        court finds a clear and 
                                        convincing likelihood 
                                        that the plaintiff will 
                                        prevail on the merits 
                                        of the case.
                          (iii) Restricted cause of action.--A 
                        participant or beneficiary affected by 
                        a benefit suspension under this 
                        paragraph shall not have a cause of 
                        action under this title.
                          (iv) Limitation on action to suspend 
                        benefits.--No action challenging a 
                        suspension of benefits following the 
                        final authorization to suspend or the 
                        denial of an application for suspension 
                        of benefits pursuant to this paragraph 
                        may be brought after one year after the 
                        earliest date on which the plaintiff 
                        acquired or should have acquired actual 
                        knowledge of the existence of such 
                        cause of action.
                  (J) Special rule for emergence from critical 
                status.--A plan certified to be in critical and 
                declining status pursuant to projections made 
                under subsection (b)(3) for which a suspension 
                of benefits has been made by the plan sponsor 
                pursuant to this paragraph shall not emerge 
                from critical status under paragraph (4)(B), 
                until such time as--
                          (i) the plan is no longer certified 
                        to be in critical or endangered status 
                        under paragraphs (1) and (2) of 
                        subsection (b), and
                          (ii) the plan is projected to avoid 
                        insolvency under section 418E.
  (f) Rules for operation of plan during adoption and 
rehabilitation period.--
          (1) Compliance with rehabilitation plan.--
                  (A) In general.--A plan may not be amended 
                after the date of the adoption of a 
                rehabilitation plan under subsection (e) so as 
                to be inconsistent with the rehabilitation 
                plan.
                  (B) Special rules for benefit increases.--A 
                plan may not be amended after the date of the 
                adoption of a rehabilitation plan under 
                subsection (e) so as to increase benefits, 
                including future benefit accruals, unless the 
                plan actuary certifies that such increase is 
                paid for out of additional contributions not 
                contemplated by the rehabilitation plan, and, 
                after taking into account the benefit increase, 
                the multiemployer plan still is reasonably 
                expected to emerge from critical status by the 
                end of the rehabilitation period on the 
                schedule contemplated in the rehabilitation 
                plan.
          (2) Restriction on lump sums and similar benefits.--
                  (A) In general.--Effective on the date the 
                notice of certification of the plan's critical 
                status for the initial critical year under 
                subsection (b)(3)(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, and
                          (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)(3)(A) for the initial critical 
        year and ending on the date of the adoption of a 
        rehabilitation 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, and
                  (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.
  (g) Adjustments disregarded in withdrawal liability 
determination.--
          (1) Benefit reduction.--Any benefit reductions under 
        subsection (e)(8) or (f), or benefit reductions or 
        suspensions while in critical and declining status 
        under subsection (e)(9), unless the withdrawal occurs 
        more than ten years after the effective date of a 
        benefit suspension by a plan in critical and declining 
        status, shall be disregarded in determining a plan's 
        unfunded vested benefits for purposes of determining an 
        employer's withdrawal liability under section 4201 of 
        the Employee Retirement Income Security Act of 1974.
          (2) Surcharges.--Any surcharges under subsection 
        (e)(7) shall be disregarded in determining the 
        allocation of unfunded vested benefits to an employer 
        under section 4211 of the Employee Retirement Income 
        Security Act of 1974 and in determining the highest 
        contribution rate under section 4219(c) of such Act, 
        except for purposes of determining the unfunded vested 
        benefits attributable to an employer under section 
        4211(c)(4) of such Act or a comparable method approved 
        under section 4211(c)(5) of such Act.
          (3) Contribution increases required by funding 
        improvement or rehabilitation plan.--
                  (A) In general.--Any increase in the 
                contribution rate (or other increase in 
                contribution requirements unless due to 
                increased levels of work, employment, or 
                periods for which compensation is provided) 
                that is required or made in order to enable the 
                plan to meet the requirement of the funding 
                improvement plan or rehabilitation plan shall 
                be disregarded in determining the allocation of 
                unfunded vested benefits to an employer under 
                section 4211 of such Act and in determining the 
                highest contribution rate under section 4219(c) 
                of such Act, except for purposes of determining 
                the unfunded vested benefits attributable to an 
                employer under section 4211(c)(4) of such Act 
                or a comparable method approved under section 
                4211(c)(5) of such Act.
                  (B) Special rules.--For purposes of this 
                paragraph, any increase in the contribution 
                rate (or other increase in contribution 
                requirements) shall be deemed to be required or 
                made in order to enable the plan to meet the 
                requirement of the funding improvement plan or 
                rehabilitation plan except for increases in 
                contribution requirements due to increased 
                levels of work, employment, or periods for 
                which compensation is provided or additional 
                contributions are used to provide an increase 
                in benefits, including an increase in future 
                benefit accruals, permitted by subsection 
                (d)(1)(B) or (f)(1)(B).
          (4) Emergence from endangered or critical status.--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 expiration date of the collective bargaining 
        agreement in effect when the plan emerges from 
        endangered or critical status. Notwithstanding the 
        preceding sentence, once the plan emerges from critical 
        or endangered status, 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.
          (5) Simplified calculations.--The Pension Benefit 
        Guaranty Corporation shall prescribe simplified methods 
        for the application of this subsection in determining 
        withdrawal liability and payment amounts under section 
        4219(c) of such Act.
  (h) Expedited resolution of plan sponsor decisions.--If, 
within 60 days of the due date for adoption of a funding 
improvement plan under subsection (c) or a rehabilitation plan 
under subsection (e), the plan sponsor of a plan in endangered 
status or a plan in critical status has not agreed on a funding 
improvement plan or rehabilitation plan, then any member of the 
board or group that constitutes the plan sponsor may require 
that the plan sponsor enter into an expedited dispute 
resolution procedure for the development and adoption of a 
funding improvement plan or rehabilitation plan.
  (i) Nonbargained participation.--
          (1) Both bargained and nonbargained employee-
        participants.--In the case of an employer that 
        contributes to a multiemployer plan with respect to 
        both employees who are covered by one or more 
        collective bargaining agreements and employees who are 
        not so covered, if the plan is in endangered status or 
        in critical status, benefits of and contributions for 
        the nonbargained employees, including surcharges on 
        those contributions, shall be determined as if those 
        nonbargained employees were covered under the first to 
        expire of the employer's collective bargaining 
        agreements in effect when the plan entered endangered 
        or critical status.
          (2) Nonbargained employees only.--In the case of an 
        employer that contributes to a multiemployer plan only 
        with respect to employees who are not covered by a 
        collective bargaining agreement, this section shall be 
        applied as if the employer were the bargaining party, 
        and its participation agreement with the plan were a 
        collective bargaining agreement with a term ending on 
        the first day of the plan year beginning after the 
        employer is provided the schedule or schedules 
        described in subsections (c) and (e).
  (j) Definitions; actuarial method.--For purposes of this 
section--
          (1) Bargaining party.--The term ``bargaining party'' 
        means--
                  (A)(i) except as provided in clause (ii), an 
                employer who has an obligation to contribute 
                under the plan; or
                  (ii) in the case of a plan described under 
                section 404(c), or a continuation of such a 
                plan, the association of employers that is the 
                employer settlor of the plan; and
                  (B) an employee organization which, for 
                purposes of collective bargaining, represents 
                plan participants employed by an employer who 
                has an obligation to contribute under the plan.
          (2) Funded percentage.--The term ``funded 
        percentage'' means the percentage equal to a fraction--
                  (A) the numerator of which is the value of 
                the plan's assets, as determined under section 
                431(c)(2), and
                  (B) the denominator of which is the accrued 
                liability of the plan, determined using 
                actuarial assumptions described in section 
                431(c)(3).
          (3) Accumulated funding deficiency.--The term 
        ``accumulated funding deficiency'' has the meaning 
        given such term in section 431(a).
          (4) Active participant.--The term ``active 
        participant'' means, in connection with a multiemployer 
        plan, a participant who is in covered service under the 
        plan.
          (5) Inactive participant.--The term ``inactive 
        participant'' means, in connection with a multiemployer 
        plan, a participant, or the beneficiary or alternate 
        payee of a participant, who--
                  (A) is not in covered service under the plan, 
                and
                  (B) is in pay status under the plan or has a 
                nonforfeitable right to benefits under the 
                plan.
          (6) Pay status.--A person is in pay status under a 
        multiemployer plan if--
                  (A) at any time during the current plan year, 
                such person is a participant or beneficiary 
                under the plan and is paid an early, late, 
                normal, or disability retirement benefit under 
                the plan (or a death benefit under the plan 
                related to a retirement benefit), or
                  (B) to the extent provided in regulations of 
                the Secretary, such person is entitled to such 
                a benefit under the plan.
          (7) Obligation to contribute.--The term ``obligation 
        to contribute'' has the meaning given such term under 
        section 4212(a) of the Employee Retirement Income 
        Security Act of 1974.
          (8) Actuarial method.--Notwithstanding any other 
        provision of this section, the actuary's determinations 
        with respect to a plan's normal cost, actuarial accrued 
        liability, and improvements in a plan's funded 
        percentage under this section shall be based upon the 
        unit credit funding method (whether or not that method 
        is used for the plan's actuarial valuation).
          (9) Plan sponsor.--For purposes of this section, 
        section 431, and section 4971(g):
                  (A) In general.--The term ``plan sponsor'' 
                means, with respect to any multiemployer plan, 
                the association, committee, joint board of 
                trustees, or other similar group of 
                representatives of the parties who establish or 
                maintain the plan.
                  (B) Special rule for section 404(c) plans.--
                In the case of a plan described in section 
                404(c) (or a continuation of such plan), such 
                term means the bargaining parties described in 
                paragraph (1).
          (10) Benefit commencement date.--The term ``benefit 
        commencement date'' means the annuity starting date (or 
        in the case of a retroactive annuity starting date, the 
        date on which benefit payments begin).
  (k) Special Rules for Plans Receiving Pension Rehabilitation 
Loans.--
          (1) Determination of withdrawal liability.--
                  (A) In general.--If any employer 
                participating in a plan at the time the plan 
                receives a loan under section 4(a) of the 
                Rehabilitation for Multiemployer Pensions Act 
                of 2019 withdraws from the plan before the end 
                of the 30-year period beginning on the date of 
                the loan, the withdrawal liability of such 
                employer shall be determined under the Employee 
                Retirement Income Security Act of 1974--
                          (i) by applying section 4219(c)(1)(D) 
                        of the Employee Retirement Income 
                        Security Act of 1974 as if the plan 
                        were terminating by the withdrawal of 
                        every employer from the plan, and
                          (ii) by determining the value of 
                        nonforfeitable benefits under the plan 
                        at the time of the deemed termination 
                        by using the interest assumptions 
                        prescribed for purposes of section 4044 
                        of the Employee Retirement Income 
                        Security Act of 1974, as prescribed in 
                        the regulations under section 4281 of 
                        the Employee Retirement Income Security 
                        Act of 1974 in the case of such a mass 
                        withdrawal.
                  (B) Annuity contracts and investment 
                portfolios purchased with loan funds.--Annuity 
                contracts purchased and portfolios implemented 
                under section 4(d)(3) of the Rehabilitation for 
                Multiemployer Pensions Act of 2019 shall not be 
                taken into account in determining the 
                withdrawal liability of any employer under 
                subparagraph (A), but the amount equal to the 
                greater of--
                          (i) the benefits provided under such 
                        contracts or portfolios to participants 
                        and beneficiaries, or
                          (ii) the remaining payments due on 
                        the loan under section 4(a) of such 
                        Act,
                shall be so taken into account.
          (2) Coordination with funding requirements.--In the 
        case of a plan which receives a loan under section 4(a) 
        of the Rehabilitation for Multiemployer Pensions Act of 
        2019--
                  (A) annuity contracts purchased and 
                portfolios implemented under section 4(d)(3) of 
                such Act, and the benefits provided to 
                participants and beneficiaries under such 
                contracts or portfolios, shall not be taken 
                into account in determining minimum required 
                contributions under section 412,
                  (B) payments on the interest and principal 
                under the loan, and any benefits owed in excess 
                of those provided under such contracts or 
                portfolios, shall be taken into account as 
                liabilities for purposes of such section, and
                  (C) if such a portfolio is projected due to 
                unfavorable investment or actuarial experience 
                to be unable to fully satisfy the liabilities 
                which it covers, the amount of the liabilities 
                projected to be unsatisfied shall be taken into 
                account as liabilities for purposes of such 
                section.

           *       *       *       *       *       *       *


Subchapter F--EXEMPT ORGANIZATIONS

           *       *       *       *       *       *       *


PART III--TAXATION OF BUSINESS INCOME OF CERTAIN EXEMPT ORGANIZATIONS

           *       *       *       *       *       *       *


SEC. 514. UNRELATED DEBT-FINANCED INCOME.

  (a) Unrelated debt-financed income and deductions.--In 
computing under section 512 the unrelated business taxable 
income for any taxable year--
          (1) Percentage of income taken into account.--There 
        shall be included with respect to each debt-financed 
        property as an item of gross income derived from an 
        unrelated trade or business an amount which is the same 
        percentage (but not in excess of 100 percent) of the 
        total gross income derived during the taxable year from 
        or on account of such property as (A) the average 
        acquisition indebtedness (as defined in subsection 
        (c)(7)) for the taxable year with respect to the 
        property is of (B) the average amount (determined under 
        regulations prescribed by the Secretary) of the 
        adjusted basis of such property during the period it is 
        held by the organization during such taxable year.
          (2) Percentage of deductions taken into account.--
        There shall be allowed as a deduction with respect to 
        each debt-financed property an amount determined by 
        applying (except as provided in the last sentence of 
        this paragraph) the percentage derived under paragraph 
        (1) to the sum determined under paragraph (3). The 
        percentage derived under this paragraph shall not be 
        applied with respect to the deduction of any capital 
        loss resulting from the carryback or carryover of net 
        capital losses under section 1212.
          (3) Deductions allowable.--The sum referred to in 
        paragraph (2) is the sum of the deductions under this 
        chapter which are directly connected with the debt-
        financed property or the income therefrom, except that 
        if the debt-financed property is of a character which 
        is subject to the allowance for depreciation provided 
        in section 167, the allowance shall be computed only by 
        use of the straight-line method.
  (b) Definition of debt-financed property.--
          (1) In general.--For purposes of this section, the 
        term ``debt-financed property'' means any property 
        which is held to produce income and with respect to 
        which there is an acquisition indebtedness (as defined 
        in subsection (c)) at any time during the taxable year 
        (or, if the property was disposed of during the taxable 
        year, with respect to which there was an acquisition 
        indebtedness at any time during the 12-month period 
        ending with the date of such disposition), except that 
        such term does not include--
                  (A)(i) any property substantially all the use 
                of which is substantially related (aside from 
                the need of the organization for income or 
                funds) to the exercise or performance by such 
                organization of its charitable, educational, or 
                other purpose or function constituting the 
                basis for its exemption under section 501 (or, 
                in the case of an organization described in 
                section 511(a)(2)(B), to the exercise or 
                performance of any purpose or function 
                designated in section 501(c)(3)), or (ii) any 
                property to which clause (i) does not apply, to 
                the extent that its use is so substantially 
                related;
                  (B) except in the case of income excluded 
                under section 512(b)(5), any property to the 
                extent that the income from such property is 
                taken into account in computing the gross 
                income of any unrelated trade or business;
                  (C) any property to the extent that the 
                income from such property is excluded by reason 
                of the provisions of paragraph (7), (8), or (9) 
                of section 512(b) in computing the gross income 
                of any unrelated trade or business;
                  (D) any property to the extent that it is 
                used in any trade or business described in 
                paragraph (1), (2), or (3) of section 513(a); 
                or
                  (E) any property the gain or loss from the 
                sale, exchange, or other disposition of which 
                would be excluded by reason of the provisions 
                of section 512(b)(19) in computing the gross 
                income of any unrelated trade or business.
        For purposes of subparagraph (A), substantially all the 
        use of a property shall be considered to be 
        substantially related to the exercise or performance by 
        an organization of its charitable, educational, or 
        other purpose or function constituting the basis for 
        its exemption under section 501 if such property is 
        real property subject to a lease to a medical clinic 
        entered into primarily for purposes which are 
        substantially related (aside from the need of such 
        organization for income or funds or the use it makes of 
        the rents derived) to the exercise or performance by 
        such organization of its charitable, educational, or 
        other purpose or function constituting the basis for 
        its exemption under section 501.
          (2) Special rule for related uses.--For purposes of 
        applying paragraphs (1) (A), (C), and (D), the use of 
        any property by an exempt organization which is related 
        to an organization shall be treated as use by such 
        organization.
          (3) Special rules when land is acquired for exempt 
        use within 10 years.--
                  (A) Neighborhood land.--If an organization 
                acquires real property for the principal 
                purpose of using the land (commencing within 10 
                years of the time of acquisition) in the manner 
                described in paragraph (1)(A) and at the time 
                of acquisition the property is in the 
                neighborhood of other property owned by the 
                organization which is used in such manner, the 
                real property acquired for such future use 
                shall not be treated as debt-financed property 
                so long as the organization does not abandon 
                its intent to so use the land within the 10-
                year period. The preceding sentence shall not 
                apply for any period after the expiration of 
                the 10-year period, and shall apply after the 
                first 5 years of the 10-year period only if the 
                organization establishes to the satisfaction of 
                the Secretary that it is reasonably certain 
                that the land will be used in the described 
                manner before the expiration of the 10-year 
                period.
                  (B) Other cases.--If the first sentence of 
                subparagraph (A) is inapplicable only because--
                          (i) the acquired land is not in the 
                        neighborhood referred to in 
                        subparagraph (A), or
                          (ii) the organization (for the period 
                        after the first 5 years of the 10-year 
                        period) is unable to establish to the 
                        satisfaction of the Secretary that it 
                        is reasonably certain that the land 
                        will be used in the manner described in 
                        paragraph (1)(A) before the expiration 
                        of the 10-year period,
                but the land is converted to such use by the 
                organization within the 10-year period, the 
                real property (subject to the provisions of 
                subparagraph (D)) shall not be treated as debt-
                financed property for any period before such 
                conversion. For purposes of this subparagraph, 
                land shall not be treated as used in the manner 
                described in paragraph (1)(A) by reason of the 
                use made of any structure which was on the land 
                when acquired by the organization.
                  (C) Limitations.--Subparagraphs (A) and (B)--
                          (i) shall apply with respect to any 
                        structure on the land when acquired by 
                        the organization, or to the land 
                        occupied by the structure, only if (and 
                        so long as) the intended future use of 
                        the land in the manner described in 
                        paragraph (1)(A) requires that the 
                        structure be demolished or removed in 
                        order to use the land in such manner;
                          (ii) shall not apply to structures 
                        erected on the land after the 
                        acquisition of the land; and
                          (iii) shall not apply to property 
                        subject to a lease which is a business 
                        lease (as defined in this section 
                        immediately before the enactment of the 
                        Tax Reform Act of 1976).
                  (D) Refund of taxes when subparagraph (B) 
                applies.--If an organization for any taxable 
                year has not used land in the manner to satisfy 
                the actual use condition of subparagraph (B) 
                before the time prescribed by law (including 
                extensions thereof) for filing the return for 
                such taxable year, the tax for such year shall 
                be computed without regard to the application 
                of subparagraph (B), but if and when such use 
                condition is satisfied, the provisions of 
                subparagraph (B) shall then be applied to such 
                taxable year. If the actual use condition of 
                subparagraph (B) is satisfied for any taxable 
                year after such time for filing the return, and 
                if credit or refund of any overpayment for the 
                taxable year resulting from the satisfaction of 
                such use condition is prevented at the close of 
                the taxable year in which the use condition is 
                satisfied, by the operation of any law or rule 
                of law (other than chapter 74, relating to 
                closing agreements and compromises), credit or 
                refund of such overpayment may nevertheless be 
                allowed or made if claim therefor is filed 
                before the expiration of 1 year after the close 
                of the taxable year in which the use condition 
                is satisfied.
                  (E) Special rule for churches.--In applying 
                this paragraph to a church or convention or 
                association of churches, in lieu of the 10-year 
                period referred to in subparagraphs (A) and (B) 
                a 15-year period shall be applied, and 
                subparagraphs (A) and (B)(ii) shall apply 
                whether or not the acquired land meets the 
                neighborhood test.
  (c) Acquisition indebtedness.--
          (1) General rule.--For purposes of this section, the 
        term ``acquisition indebtedness'' means, with respect 
        to any debt-financed property, the unpaid amount of--
                  (A) the indebtedness incurred by the 
                organization in acquiring or improving such 
                property;
                  (B) the indebtedness incurred before the 
                acquisition or improvement of such property if 
                such indebtedness would not have been incurred 
                but for such acquisition or improvement; and
                  (C) the indebtedness incurred after the 
                acquisition or improvement of such property if 
                such indebtedness would not have been incurred 
                but for such acquisition or improvement and the 
                incurrence of such indebtedness was reasonably 
                foreseeable at the time of such acquisition or 
                improvement.
          (2) Property acquired subject to mortgage, etc..--For 
        purposes of this subsection--
                  (A) General rule.--Where property (no matter 
                how acquired) is acquired subject to a mortgage 
                or other similar lien, the amount of the 
                indebtedness secured by such mortgage or lien 
                shall be considered as an indebtedness of the 
                organization incurred in acquiring such 
                property even though the organization did not 
                assume or agree to pay such indebtedness.
                  (B) Exceptions.--Where property subject to a 
                mortgage is acquired by an organization by 
                bequest or devise, the indebtedness secured by 
                the mortgage shall not be treated as 
                acquisition indebtedness during a period of 10 
                years following the date of the acquisition. If 
                an organization acquires property by gift 
                subject to a mortgage which was placed on the 
                property more than 5 years before the gift, 
                which property was held by the donor more than 
                5 years before the gift, the indebtedness 
                secured by such mortgage shall not be treated 
                as acquisition indebtedness during a period of 
                10 years following the date of such gift. This 
                subparagraph shall not apply if the 
                organization, in order to acquire the equity in 
                the property by bequest, devise, or gift, 
                assumes and agrees to pay the indebtedness 
                secured by the mortgage, or if the organization 
                makes any payment for the equity in the 
                property owned by the decedent or the donor.
                  (C) Liens for taxes or assessments.--Where 
                State law provides that--
                          (i) a lien for taxes, or
                          (ii) a lien for assessments,
                made by a State or a political subdivision 
                thereof attaches to property prior to the time 
                when such taxes or assessments become due and 
                payable, then such lien shall be treated as 
                similar to a mortgage (within the meaning of 
                subparagraph (A)) but only after such taxes or 
                assessments become due and payable and the 
                organization has had an opportunity to pay such 
                taxes or assessments in accordance with State 
                law.
          (3) Extension of obligations.--For purposes of this 
        section, an extension, renewal, or refinancing of an 
        obligation evidencing a pre-existing indebtedness shall 
        not be treated as the creation of a new indebtedness.
          (4) Indebtedness incurred in performing exempt 
        purpose.--For purposes of this section, the term 
        ``acquisition indebtedness'' does not include 
        indebtedness the incurrence of which is inherent in the 
        performance or exercise of the purpose or function 
        constituting the basis of the organization's exemption, 
        such as the indebtedness incurred by a credit union 
        described in section 501(c)(14) in accepting deposits 
        from its members.
          (5) Annuities.--For purposes of this section, the 
        term ``acquisition indebtedness'' does not include an 
        obligation to pay an annuity which--
                  (A) is the sole consideration (other than a 
                mortgage to which paragraph (2)(B) applies) 
                issued in exchange for property if, at the time 
                of the exchange, the value of the annuity is 
                less than 90 percent of the value of the 
                property received in the exchange,
                  (B) is payable over the life of one 
                individual in being at the time the annuity is 
                issued, or over the lives of two individuals in 
                being at such time, and
                  (C) is payable under a contract which--
                          (i) does not guarantee a minimum 
                        amount of payments or specify a maximum 
                        amount of payments, and
                          (ii) does not provide for any 
                        adjustment of the amount of the annuity 
                        payments by reference to the income 
                        received from the transferred property 
                        or any other property.
          (6) Certain Federal financing.--
                  (A) In general.--For purposes of this 
                section, the term ``acquisition indebtedness'' 
                does not include--
                          (i) an obligation, to the extent that 
                        it is insured by the Federal Housing 
                        Administration, to finance the 
                        purchase, rehabilitation, or 
                        construction of housing for low and 
                        moderate income persons, [or]
                          (ii) indebtedness incurred by a small 
                        business investment company licensed 
                        after the date of the enactment of the 
                        American Jobs Creation Act of 2004 
                        under the Small Business Investment Act 
                        of 1958 if such indebtedness is 
                        evidenced by a debenture--
                                  (I) issued by such company 
                                under section 303(a) of such 
                                Act, and
                                  (II) held or guaranteed by 
                                the Small Business 
                                Administration[.], or
                          (iii) indebtedness with respect to a 
                        multiemployer plan under a loan made by 
                        the Pension Rehabilitation 
                        Administration pursuant to section 4 of 
                        the Rehabilitation for Multiemployer 
                        Pensions Act of 2019.
                  (B) Limitation.--Subparagraph (A)(ii) shall 
                not apply with respect to any small business 
                investment company during any period that--
                          (i) any organization which is exempt 
                        from tax under this title (other than a 
                        governmental unit) owns more than 25 
                        percent of the capital or profits 
                        interest in such company, or
                          (ii) organizations which are exempt 
                        from tax under this title (including 
                        governmental units other than any 
                        agency or instrumentality of the United 
                        States) own, in the aggregate, 50 
                        percent or more of the capital or 
                        profits interest in such company.
          (7) Average acquisition indebtedness.--For purposes 
        of this section, the term ``average acquisition 
        indebtedness'' for any taxable year with respect to a 
        debt-financed property means the average amount, 
        determined under regulations prescribed by the 
        Secretary of the acquisition indebtedness during the 
        period the property is held by the organization during 
        the taxable year, except that for the purpose of 
        computing the percentage of any gain or loss to be 
        taken into account on a sale or other disposition of 
        debt-financed property, such term means the highest 
        amount of the acquisition indebtedness with respect to 
        such property during the 12-month period ending with 
        the date of the sale or other disposition.
          (8) Securities subject to loans.--For purposes of 
        this section--
                  (A) payments with respect to securities loans 
                (as defined in section 512(a)(5)) shall be 
                deemed to be derived from the securities loaned 
                and not from collateral security or the 
                investment of collateral security from such 
                loans,
                  (B) any deductions which are directly 
                connected with collateral security for such 
                loan, or with the investment of collateral 
                security, shall be deemed to be deductions 
                which are directly connected with the 
                securities loaned, and
                  (C) an obligation to return collateral 
                security shall not be treated as acquisition 
                indebtedness (as defined in paragraph (1)).
          (9) Real property acquired by a qualified 
        organization.--
                  (A) In general.--Except as provided in 
                subparagraph (B), the term ``acquisition 
                indebtedness'' does not, for purposes of this 
                section, include indebtedness incurred by a 
                qualified organization in acquiring or 
                improving any real property. For purposes of 
                this paragraph, an interest in a mortgage shall 
                in no event be treated as real property.
                  (B) Exceptions.--The provisions of 
                subparagraph (A) shall not apply in any case in 
                which--
                          (i) the price for the acquisition or 
                        improvement is not a fixed amount 
                        determined as of the date of the 
                        acquisition or the completion of the 
                        improvement;
                          (ii) the amount of any indebtedness 
                        or any other amount payable with 
                        respect to such indebtedness, or the 
                        time for making any payment of any such 
                        amount, is dependent, in whole or in 
                        part, upon any revenue, income, or 
                        profits derived from such real 
                        property;
                          (iii) the real property is at any 
                        time after the acquisition leased by 
                        the qualified organization to the 
                        person selling such property to such 
                        organization or to any person who bears 
                        a relationship described in section 
                        267(b) or 707(b) to such person;
                          (iv) the real property is acquired by 
                        a qualified trust from, or is at any 
                        time after the acquisition leased by 
                        such trust to, any person who--
                                  (I) bears a relationship 
                                which is described in 
                                subparagraph (C), (E), or (G) 
                                of section 4975(e)(2) to any 
                                plan with respect to which such 
                                trust was formed, or
                                  (II) bears a relationship 
                                which is described in 
                                subparagraph (F) or (H) of 
                                section 4975(e)(2) to any 
                                person described in subclause 
                                (I);
                          (v) any person described in clause 
                        (iii) or (iv) provides the qualified 
                        organization with financing in 
                        connection with the acquisition or 
                        improvement; or
                          (vi) the real property is held by a 
                        partnership unless the partnership 
                        meets the requirements of clauses (i) 
                        through (v) and unless--
                                  (I) all of the partners of 
                                the partnership are qualified 
                                organizations,
                                  (II) each allocation to a 
                                partner of the partnership 
                                which is a qualified 
                                organization is a qualified 
                                allocation (within the meaning 
                                of section 168(h)(6)), or
                                  (III) such partnership meets 
                                the requirements of 
                                subparagraph (E).
                For purposes of subclause (I) of clause (vi), 
                an organization shall not be treated as a 
                qualified organization if any income of such 
                organization is unrelated business taxable 
                income.
                  (C) Qualified organization.--For purposes of 
                this paragraph, the term ``qualified 
                organization'' means--
                          (i) an organization described in 
                        section 170(b)(1)(A)(ii) and its 
                        affiliated support organizations 
                        described in section 509(a)(3);
                          (ii) any trust which constitutes a 
                        qualified trust under section 401;
                          (iii) an organization described in 
                        section 501(c)(25); or
                          (iv) a retirement income account 
                        described in section 403(b)(9).
                  (D) Other pass-thru entities; tiered 
                entities.--Rules similar to the rules of 
                subparagraph (B)(vi) shall also apply in the 
                case of any pass-thru entity other than a 
                partnership and in the case of tiered 
                partnerships and other entities.
                  (E) Certain allocations permitted.--
                          (i) In general.--A partnership meets 
                        the requirements of this subparagraph 
                        if--
                                  (I) the allocation of items 
                                to any partner which is a 
                                qualified organization cannot 
                                result in such partner having a 
                                share of the overall 
                                partnership income for any 
                                taxable year greater than such 
                                partner's share of the overall 
                                partnership loss for the 
                                taxable year for which such 
                                partner's loss share will be 
                                the smallest, and
                                  (II) each allocation with 
                                respect to the partnership has 
                                substantial economic effect 
                                within the meaning of section 
                                704(b)(2).
                         For purposes of this clause, items 
                        allocated under section 704(c) shall 
                        not be taken into account.
                          (ii) Special rules.--
                                  (I) Chargebacks.--Except as 
                                provided in regulations, a 
                                partnership may without 
                                violating the requirements of 
                                this subparagraph provide for 
                                chargebacks with respect to 
                                disproportionate losses 
                                previously allocated to 
                                qualified organizations and 
                                disproportionate income 
                                previously allocated to other 
                                partners. Any chargeback 
                                referred to in the preceding 
                                sentence shall not be at a 
                                ratio in excess of the ratio 
                                under which the loss or income 
                                (as the case may be) was 
                                allocated.
                                  (II) Preferred rates of 
                                return, etc..--To the extent 
                                provided in regulations, a 
                                partnership may without 
                                violating the requirements of 
                                this subparagraph provide for 
                                reasonable preferred returns or 
                                reasonable guaranteed payments.
                          (iii) Regulations.--The Secretary 
                        shall prescribe such regulations as may 
                        be necessary to carry out the purposes 
                        of this subparagraph, including 
                        regulations which may provide for 
                        exclusion or segregation of items.
                  (F) Special rules for organizations described 
                in section 501(c)(25).--
                          (i) In general.--In computing under 
                        section 512 the unrelated business 
                        taxable income of a disqualified holder 
                        of an interest in an organization 
                        described in section 501(c)(25), there 
                        shall be taken into account--
                                  (I) as gross income derived 
                                from an unrelated trade or 
                                business, such holder's pro 
                                rata share of the items of 
                                income described in clause 
                                (ii)(I) of such organization, 
                                and
                                  (II) as deductions allowable 
                                in computing unrelated business 
                                taxable income, such holder's 
                                pro rata share of the items of 
                                deduction described in clause 
                                (ii)(II) of such organization.
                 Such amounts shall be taken into account for 
                the taxable year of the holder in which (or 
                with which) the taxable year of such 
                organization ends.
                          (ii) Description of amounts.--For 
                        purposes of clause (i)--
                                  (I) gross income is described 
                                in this clause to the extent 
                                such income would (but for this 
                                paragraph) be treated under 
                                subsection (a) as derived from 
                                an unrelated trade or business, 
                                and
                                  (II) any deduction is 
                                described in this clause to the 
                                extent it would (but for this 
                                paragraph) be allowable under 
                                subsection (a)(2) in computing 
                                unrelated business taxable 
                                income.
                          (iii) Disqualified holder.--For 
                        purposes of this subparagraph, the term 
                        ``disqualified holder'' means any 
                        shareholder (or beneficiary) which is 
                        not described in clause (i) or (ii) of 
                        subparagraph (C).
                  (G) Special rules for purposes of the 
                exceptions.--Except as otherwise provided by 
                regulations--
                          (i) Small leases disregarded.--For 
                        purposes of clauses (iii) and (iv) of 
                        subparagraph (B), a lease to a person 
                        described in such clause (iii) or (iv) 
                        shall be disregarded if no more than 25 
                        percent of the leasable floor space in 
                        a building (or complex of buildings) is 
                        covered by the lease and if the lease 
                        is on commercially reasonable terms.
                          (ii) Commercially reasonable 
                        financing.--Clause (v) of subparagraph 
                        (B) shall not apply if the financing is 
                        on commercially reasonable terms.
                  (H) Qualifying sales by financial 
                institutions.--
                          (i) In general.--In the case of a 
                        qualifying sale by a financial 
                        institution, except as provided in 
                        regulations, clauses (i) and (ii) of 
                        subparagraph (B) shall not apply with 
                        respect to financing provided by such 
                        institution for such sale.
                          (ii) Qualifying sale.--For purposes 
                        of this clause, there is a qualifying 
                        sale by a financial institution if--
                                  (I) a qualified organization 
                                acquires property described in 
                                clause (iii) from a financial 
                                institution and any gain 
                                recognized by the financial 
                                institution with respect to the 
                                property is ordinary income,
                                  (II) the stated principal 
                                amount of the financing 
                                provided by the financial 
                                institution does not exceed the 
                                amount of the outstanding 
                                indebtedness (including accrued 
                                but unpaid interest) of the 
                                financial institution with 
                                respect to the property 
                                described in clause (iii) 
                                immediately before the 
                                acquisition referred to in 
                                clause (iii) or (v), whichever 
                                is applicable, and
                                  (III) the present value 
                                (determined as of the time of 
                                the sale and by using the 
                                applicable Federal rate 
                                determined under section 
                                1274(d)) of the maximum amount 
                                payable pursuant to the 
                                financing that is determined by 
                                reference to the revenue, 
                                income, or profits derived from 
                                the property cannot exceed 30 
                                percent of the total purchase 
                                price of the property 
                                (including the contingent 
                                payments).
                          (iii) Property to which subparagraph 
                        applies.--Property is described in this 
                        clause if such property is foreclosure 
                        property, or is real property which--
                                  (I) was acquired by the 
                                qualified organization from a 
                                financial institution which is 
                                in conservatorship or 
                                receivership, or from the 
                                conservator or receiver of such 
                                an institution, and
                                  (II) was held by the 
                                financial institution at the 
                                time it entered into 
                                conservatorship or 
                                receivership.
                          (iv) Financial institution.--For 
                        purposes of this subparagraph, the term 
                        ``financial institution'' means--
                                  (I) any financial institution 
                                described in section 581 or 
                                591(a),
                                  (II) any other corporation 
                                which is a direct or indirect 
                                subsidiary of an institution 
                                referred to in subclause (I) 
                                but only if, by virtue of being 
                                affiliated with such 
                                institution, such other 
                                corporation is subject to 
                                supervision and examination by 
                                a Federal or State agency which 
                                regulates institutions referred 
                                to in subclause (I), and
                                  (III) any person acting as a 
                                conservator or receiver of an 
                                entity referred to in subclause 
                                (I) or (II) (or any government 
                                agency or corporation 
                                succeeding to the rights or 
                                interest of such person).
                          (v) Foreclosure property.--For 
                        purposes of this subparagraph, the term 
                        ``foreclosure property'' means any real 
                        property acquired by the financial 
                        institution as the result of having bid 
                        on such property at foreclosure, or by 
                        operation of an agreement or process of 
                        law, after there was a default (or a 
                        default was imminent) on indebtedness 
                        which such property secured.
  (d) Basis of debt-financed property acquired in corporate 
liquidation.--For purposes of this subtitle, if the property 
was acquired in a complete or partial liquidation of a 
corporation in exchange for its stock, the basis of the 
property shall be the same as it would be in the hands of the 
transferor corporation, increased by the amount of gain 
recognized to the transferor corporation upon such distribution 
and by the amount of any gain to the organization which was 
included, on account of such distribution, in unrelated 
business taxable income under subsection (a).
  (e) Allocation rules.--Where debt-financed property is held 
for purposes described in subsection (b)(1)(A), (B), (C), or 
(D) as well as for other purposes, proper allocation shall be 
made with respect to basis, indebtedness, and income and 
deductions. The allocations required by this section shall be 
made in accordance with regulations prescribed by the Secretary 
to the extent proper to carry out the purposes of this section.
  (f) Personal property leased with real property.--For 
purposes of this section, the term ``real property'' includes 
personal property of the lessor leased by it to a lessee of its 
real estate if the lease of such personal property is made 
under, or in connection with, the lease of such real estate.
  (g) Regulations.--The Secretary shall prescribe such 
regulations as may be necessary or appropriate to carry out the 
purposes of this section, including regulations to prevent the 
circumvention of any provision of this section through the use 
of segregated asset accounts.

           *       *       *       *       *       *       *


Subtitle F--Procedure and Administration

           *       *       *       *       *       *       *


CHAPTER 61--INFORMATION AND RETURNS

           *       *       *       *       *       *       *


Subchapter A--RETURNS AND RECORDS

           *       *       *       *       *       *       *


PART III--INFORMATION RETURNS

           *       *       *       *       *       *       *


 Subpart E--REGISTRATION OF AND INFORMATION CONCERNING PENSION, ETC., 
                                 PLANS

     * * * * * * *
Sec. 6059A. Reports of plans receiving pension rehabilitation loans.

           *       *       *       *       *       *       *


SEC. 6059A. REPORTS OF PLANS RECEIVING PENSION REHABILITATION LOANS.

  (a) In General.--In the case of a plan receiving a loan under 
section 4(a) of the Rehabilitation for Multiemployer Pensions 
Act of 2019, with respect to the first plan year beginning 
after the date of the loan and each of the 29 succeeding plan 
years, not later than the 90th day of each such plan year the 
plan sponsor shall file with the Secretary a report (including 
appropriate documentation and actuarial certifications from the 
plan actuary, as required by the Secretary) that contains--
          (1) the funded percentage (as defined in section 
        432(i)(2)) as of the first day of such plan year, and 
        the underlying actuarial value of assets (determined 
        with regard, and without regard, to annuity contracts 
        purchased and portfolios implemented with proceeds of 
        such loan) and liabilities (including any amounts due 
        with respect to such loan) taken into account in 
        determining such percentage,
          (2) the market value of the assets of the plan 
        (determined as provided in paragraph (1)) as of the 
        last day of the plan year preceding such plan year,
          (3) the total value of all contributions made by 
        employers and employees during the plan year preceding 
        such plan year,
          (4) the total value of all benefits paid during the 
        plan year preceding such plan year,
          (5) cash flow projections for such plan year and the 
        9 succeeding plan years, and the assumptions used in 
        making such projections,
          (6) funding standard account projections for such 
        plan year and the 9 succeeding plan years, and the 
        assumptions relied upon in making such projections,
          (7) the total value of all investment gains or losses 
        during the plan year preceding such plan year,
          (8) any significant reduction in the number of active 
        participants during the plan year preceding such plan 
        year, and the reason for such reduction,
          (9) a list of employers that withdrew from the plan 
        in the plan year preceding such plan year, and the 
        resulting reduction in contributions,
          (10) a list of employers that paid withdrawal 
        liability to the plan during the plan year preceding 
        such plan year and, for each employer, a total 
        assessment of the withdrawal liability paid, the annual 
        payment amount, and the number of years remaining in 
        the payment schedule with respect to such withdrawal 
        liability,
          (11) any material changes to benefits, accrual rates, 
        or contribution rates during the plan year preceding 
        such plan year, and whether such changes relate to the 
        terms of the loan,
          (12) details regarding any funding improvement plan 
        or rehabilitation plan and updates to such plan,
          (13) the number of participants and beneficiaries 
        during the plan year preceding such plan year who are 
        active participants, the number of participants and 
        beneficiaries in pay status, and the number of 
        terminated vested participants and beneficiaries,
          (14) the amount of any financial assistance received 
        under section 4261 of the Employee Retirement Income 
        Security Act of 1974 to pay benefits during the 
        preceding plan year, and the total amount of such 
        financial assistance received for all preceding years,
          (15) the information contained on the most recent 
        annual funding notice submitted by the plan under 
        section 101(f) of the Employee Retirement Income 
        Security Act of 1974,
          (16) the information contained on the most recent 
        annual return under section 6058 and actuarial report 
        under section 6059 of the plan, and
          (17) copies of the plan document and amendments, 
        other retirement benefit or ancillary benefit plans 
        relating to the plan and contribution obligations under 
        such plans, a breakdown of administrative expenses of 
        the plan, participant census data and distribution of 
        benefits, the most recent actuarial valuation report as 
        of the plan year, copies of collective bargaining 
        agreements, and financial reports, and such other 
        information as the Secretary, in consultation with the 
        Director of the Pension Rehabilitation Administration, 
        may require.
  (b) Electronic Submission.--The report required under 
subsection (a) shall be submitted electronically.
  (c) Information Sharing.--The Secretary shall share the 
information in the report under subsection (a) with the 
Secretary of Labor and the Director of the Pension Benefit 
Guaranty Corporation.
  (d) Report to Participants, Beneficiaries, and Employers.--
Each plan sponsor required to file a report under subsection 
(a) shall, before the expiration of the time prescribed for the 
filing of such report, also provide a summary (written in a 
manner so as to be understood by the average plan participant) 
of the information in such report to participants and 
beneficiaries in the plan and to each employer with an 
obligation to contribute to the plan.

           *       *       *       *       *       *       *


 CHAPTER 68--ADDITIONS TO THE TAX, ADDITIONAL AMOUNTS, AND ASSESSABLE 
PENALTIES

           *       *       *       *       *       *       *


Subchapter A--ADDITIONS TO THE TAX AND ADDITIONAL AMOUNTS

           *       *       *       *       *       *       *


PART I--GENERAL PROVISIONS

           *       *       *       *       *       *       *


SEC. 6652. FAILURE TO FILE CERTAIN INFORMATION RETURNS, REGISTRATION 
                    STATEMENTS, ETC.

  (a) Returns with respect to certain payments aggregating less 
than $10.--In the case of each failure to file a statement of a 
payment to another person required under the authority of--
          (1) section 6042(a)(2) (relating to payments of 
        dividends aggregating less than $10), or
          (2) section 6044(a)(2) (relating to payments of 
        patronage dividends aggregating less than $10),
on the date prescribed therefor (determined with regard to any 
extension of time for filing), unless it is shown that such 
failure is due to reasonable cause and not to willful neglect, 
there shall be paid (upon notice and demand by the Secretary 
and in the same manner as tax) by the person failing to so file 
the statement, $1 for each such statement not so filed, but the 
total amount imposed on the delinquent person for all such 
failures during the calendar year shall not exceed $1,000.
  (b) Failure to report tips.--In the case of failure by an 
employee to report to his employer on the date and in the 
manner prescribed therefor any amount of tips required to be so 
reported by section 6053(a) which are wages (as defined in 
section 3121(a)) or which are compensation (as defined in 
section 3231(e)), unless it is shown that such failure is due 
to reasonable cause and not due to willful neglect, there shall 
be paid by the employee, in addition to the tax imposed by 
section 3101 or section 3201 (as the case may be) with respect 
to the amount of tips which he so failed to report, an amount 
equal to 50 percent of such tax.
  (c) Returns by exempt organizations and by certain trusts.--
          (1) Annual returns under section 6033(a)(1) or 
        6012(a)(6).--
                  (A) Penalty on organization.--In the case 
                of--
                          (i) a failure to file a return 
                        required under section 6033(a)(1) 
                        (relating to returns by exempt 
                        organizations) or section 6012(a)(6) 
                        (relating to returns by political 
                        organizations) on the date and in the 
                        manner prescribed therefor (determined 
                        with regard to any extension of time 
                        for filing), or
                          (ii) a failure to include any of the 
                        information required to be shown on a 
                        return filed under section 6033(a)(1) 
                        or section 6012(a)(6) or to show the 
                        correct information,
                there shall be paid by the exempt organization 
                $20 for each day during which such failure 
                continues. The maximum penalty under this 
                subparagraph on failures with respect to any 1 
                return shall not exceed the lesser of $10,000 
                or 5 percent of the gross receipts of the 
                organization for the year. In the case of an 
                organization having gross receipts exceeding 
                $1,000,000 for any year, with respect to the 
                return required under section 6033(a)(1) or 
                section 6012(a)(6) for such year, in applying 
                the first sentence of this subparagraph, the 
                amount of the penalty for each day during which 
                a failure continues shall be $100 in lieu of 
                the amount otherwise specified, and, in lieu of 
                applying the second sentence of this 
                subparagraph, the maximum penalty under this 
                subparagraph shall not exceed $50,000.
                  (B) Managers.--
                          (i) In general.--The Secretary may 
                        make a written demand on any 
                        organization subject to penalty under 
                        subparagraph (A) specifying therein a 
                        reasonable future date by which the 
                        return shall be filed (or the 
                        information furnished) for purposes of 
                        this subparagraph.
                          (ii) Failure to comply with demand.--
                        If any person fails to comply with any 
                        demand under clause (i) on or before 
                        the date specified in such demand, 
                        there shall be paid by the person 
                        failing to so comply $10 for each day 
                        after the expiration of the time 
                        specified in such demand during which 
                        such failure continues. The maximum 
                        penalty imposed under this subparagraph 
                        on all persons for failures with 
                        respect to any 1 return shall not 
                        exceed $5,000.
                  (C) Public inspection of annual returns and 
                reports.--In the case of a failure to comply 
                with the requirements of section 6104(d) with 
                respect to any annual return on the date and in 
                the manner prescribed therefor (determined with 
                regard to any extension of time for filing) or 
                report required under section 527(j), there 
                shall be paid by the person failing to meet 
                such requirements $20 for each day during which 
                such failure continues. The maximum penalty 
                imposed under this subparagraph on all persons 
                for failures with respect to any 1 return or 
                report shall not exceed $10,000.
                  (D) Public inspection of applications for 
                exemption and notice of status.--In the case of 
                a failure to comply with the requirements of 
                section 6104(d) with respect to any exempt 
                status application materials (as defined in 
                such section) or notice materials (as defined 
                in such section) on the date and in the manner 
                prescribed therefor, there shall be paid by the 
                person failing to meet such requirements $20 
                for each day during which such failure 
                continues.
                  (E) No penalty for certain annual notices.--
                This paragraph shall not apply with respect to 
                any notice required under section 6033(i).
          (2) Returns under section 6034 or 6043(b).--
                  (A) Penalty on organization or trust.--In the 
                case of a failure to file a return required 
                under section 6034 (relating to returns by 
                certain trusts) or section 6043(b) (relating to 
                terminations, etc., of exempt organizations), 
                on the date and in the manner prescribed 
                therefor (determined with regard to any 
                extension of time for filing), there shall be 
                paid by the exempt organization or trust 
                failing so to file $10 for each day during 
                which such failure continues, but the total 
                amount imposed under this subparagraph on any 
                organization or trust for failure to file any 1 
                return shall not exceed $5,000.
                  (B) Managers.--The Secretary may make written 
                demand on an organization or trust failing to 
                file under subparagraph (A) specifying therein 
                a reasonable future date by which such filing 
                shall be made for purposes of this 
                subparagraph. If such filing is not made on or 
                before such date, there shall be paid by the 
                person failing so to file $10 for each day 
                after the expiration of the time specified in 
                the written demand during which such failure 
                continues, but the total amount imposed under 
                this subparagraph on all persons for failure to 
                file any 1 return shall not exceed $5,000.
                  (C) Split-interest trusts.--In the case of a 
                trust which is required to file a return under 
                section 6034(a), subparagraphs (A) and (B) of 
                this paragraph shall not apply and paragraph 
                (1) shall apply in the same manner as if such 
                return were required under section 6033, except 
                that--
                          (i) the 5 percent limitation in the 
                        second sentence of paragraph (1)(A) 
                        shall not apply,
                          (ii) in the case of any trust with 
                        gross income in excess of $250,000, in 
                        applying the first sentence of 
                        paragraph (1)(A), the amount of the 
                        penalty for each day during which a 
                        failure continues shall be $100 in lieu 
                        of the amount otherwise specified, and 
                        in lieu of applying the second sentence 
                        of paragraph (1)(A), the maximum 
                        penalty under paragraph (1)(A) shall 
                        not exceed $50,000, and
                          (iii) the third sentence of paragraph 
                        (1)(A) shall be disregarded.
                In addition to any penalty imposed on the trust 
                pursuant to this subparagraph, if the person 
                required to file such return knowingly fails to 
                file the return, such penalty shall also be 
                imposed on such person who shall be personally 
                liable for such penalty.
          (3) Disclosure under section 6033(a)(2).--
                  (A) Penalty on entities.--In the case of a 
                failure to file a disclosure required under 
                section 6033(a)(2), there shall be paid by the 
                tax-exempt entity (the entity manager in the 
                case of a tax-exempt entity described in 
                paragraph (4), (5), (6), or (7) of section 
                4965(c)) $100 for each day during which such 
                failure continues. The maximum penalty under 
                this subparagraph on failures with respect to 
                any 1 disclosure shall not exceed $50,000.
                  (B) Written demand.--
                          (i) In general.--The Secretary may 
                        make a written demand on any entity or 
                        manager subject to penalty under 
                        subparagraph (A) specifying therein a 
                        reasonable future date by which the 
                        disclosure shall be filed for purposes 
                        of this subparagraph.
                          (ii) Failure to comply with demand.--
                        If any entity or manager fails to 
                        comply with any demand under clause (i) 
                        on or before the date specified in such 
                        demand, there shall be paid by such 
                        entity or manager failing to so comply 
                        $100 for each day after the expiration 
                        of the time specified in such demand 
                        during which such failure continues. 
                        The maximum penalty imposed under this 
                        subparagraph on all entities and 
                        managers for failures with respect to 
                        any 1 disclosure shall not exceed 
                        $10,000.
                  (C) Definitions.--Any term used in this 
                section which is also used in section 4965 
                shall have the meaning given such term under 
                section 4965.
          (4) Notices under section 506.--
                  (A) Penalty on organization.--In the case of 
                a failure to submit a notice required under 
                section 506(a) (relating to organizations 
                required to notify Secretary of intent to 
                operate as 501(c)(4)) on the date and in the 
                manner prescribed therefor, there shall be paid 
                by the organization failing to so submit $20 
                for each day during which such failure 
                continues, but the total amount imposed under 
                this subparagraph on any organization for 
                failure to submit any one notice shall not 
                exceed $5,000.
                  (B) Managers.--The Secretary may make written 
                demand on an organization subject to penalty 
                under subparagraph (A) specifying in such 
                demand a reasonable future date by which the 
                notice shall be submitted for purposes of this 
                subparagraph. If such notice is not submitted 
                on or before such date, there shall be paid by 
                the person failing to so submit $20 for each 
                day after the expiration of the time specified 
                in the written demand during which such failure 
                continues, but the total amount imposed under 
                this subparagraph on all persons for failure to 
                submit any one notice shall not exceed $5,000.
          (5) Reasonable cause exception.--No penalty shall be 
        imposed under this subsection with respect to any 
        failure if it is shown that such failure is due to 
        reasonable cause.
          (6) Other special rules.--
                  (A) Treatment as tax.--Any penalty imposed 
                under this subsection shall be paid on notice 
                and demand of the Secretary and in the same 
                manner as tax.
                  (B) Joint and several liability.--If more 
                than 1 person is liable under this subsection 
                for any penalty with respect to any failure, 
                all such persons shall be jointly and severally 
                liable with respect to such failure.
                  (C) Person.--For purposes of this subsection, 
                the term ``person'' means any officer, 
                director, trustee, employee, or other 
                individual who is under a duty to perform the 
                act in respect of which the violation occurs.
          (7) Adjustment for inflation.--
                  (A) In general.--In the case of any failure 
                relating to a return required to be filed in a 
                calendar year beginning after 2014, each of the 
                dollar amounts under paragraphs (1), (2), and 
                (3) shall be increased by an amount equal to 
                such dollar amount multiplied by the cost-of-
                living adjustment determined under section 
                1(f)(3) for the calendar year determined by 
                substituting ``calendar year 2013'' for 
                ``calendar year 2016'' in subparagraph (A)(ii) 
                thereof.
                  (B) Rounding.--If any amount adjusted under 
                subparagraph (A)--
                          (i) is not less than $5,000 and is 
                        not a multiple of $500, such amount 
                        shall be rounded to the next lowest 
                        multiple of $500, and
                          (ii) is not described in clause (i) 
                        and is not a multiple of $5, such 
                        amount shall be rounded to the next 
                        lowest multiple of $5.
  (d) Annual registration and other notification by pension 
plan.--
          (1) Registration.--In the case of any failure to file 
        a registration statement required under section 6057(a) 
        (relating to annual registration of certain plans) 
        which includes all participants required to be included 
        in such statement, on the date prescribed therefor 
        (determined without regard to any extension of time for 
        filing), unless it is shown that such failure is due to 
        reasonable cause, there shall be paid (on notice and 
        demand by the Secretary and in the same manner as tax) 
        by the person failing so to file, an amount equal to $1 
        for each participant with respect to whom there is a 
        failure to file, multiplied by the number of days 
        during which such failure continues, but the total 
        amount imposed under this paragraph on any person for 
        any failure to file with respect to any plan year shall 
        not exceed $5,000.
          (2) Notification of change of status.--In the case of 
        failure to file a notification required under section 
        6057(b) (relating to notification of change of status) 
        on the date prescribed therefor (determined without 
        regard to any extension of time for filing), unless it 
        is shown that such failure is due to reasonable cause, 
        there shall be paid (on notice and demand by the 
        Secretary and in the same manner as tax) by the person 
        failing so to file, $1 for each day during which such 
        failure continues, but the total amounts imposed under 
        this paragraph on any person for failure to file any 
        notification shall not exceed $1,000.
  (e) Information required in connection with certain plans of 
deferred compensation, etc..--In the case of failure to file a 
return or statement required under section 6058 (relating to 
information required in connection with certain plans of 
deferred compensation), 6059A (relating to reports of plans 
receiving pension rehabilitation loans) , 6047 (relating to 
information relating to certain trusts and annuity and bond 
purchase plans), or 6039D (relating to returns and records with 
respect to certain fringe benefit plans) on the date and in the 
manner prescribed therefor (determined with regard to any 
extension of time for filing), unless it is shown that such 
failure is due to reasonable cause, there shall be paid (on 
notice and demand by the Secretary and in the same manner as 
tax) by the person failing so to file, $25 ($100 in the case of 
failures under section 6059A) for each day during which such 
failure continues, but the total amount imposed under this 
subsection on any person for failure to file any return shall 
not exceed $15,000. This subsection shall not apply to any 
return or statement which is an information return described in 
section 6724(d)(1)(C)(ii) or a payee statement described in 
section 6724(d)(2)(AA). In the case of a failure with respect 
to section 6059A, the amount imposed under this subsection 
shall not be paid from the assets of the plan.
  (f) Returns required under section 6039C.--
          (1) In general.--In the case of each failure to make 
        a return required by section 6039C which contains the 
        information required by such section on the date 
        prescribed therefor (determined with regard to any 
        extension of time for filing), unless it is shown that 
        such failure is due to reasonable cause and not to 
        willful neglect, the amount determined under paragraph 
        (2) shall be paid (upon notice and demand by the 
        Secretary and in the same manner as tax) by the person 
        failing to make such return.
          (2) Amount of penalty.--For purposes of paragraph 
        (1), the amount determined under this paragraph with 
        respect to any failure shall be $25 for each day during 
        which such failure continues.
          (3) Limitation.--The amount determined under 
        paragraph (2) with respect to any person for failing to 
        meet the requirements of section 6039C for any calendar 
        year shall not exceed the lesser of--
                  (A) $25,000, or
                  (B) 5 percent of the aggregate of the fair 
                market value of the United States real property 
                interests owned by such person at any time 
                during such year.
        For purposes of the preceding sentence, fair market 
        value shall be determined as of the end of the calendar 
        year (or, in the case of any property disposed of 
        during the calendar year, as of the date of such 
        disposition).
  (h) Failure to give notice to recipients of certain pension, 
etc., distributions.--In the case of each failure to provide 
notice as required by section 3405(e)(10)(B), at the time 
prescribed therefor, unless it is shown that such failure is 
due to reasonable cause and not to willful neglect, there shall 
be paid, on notice and demand of the Secretary and in the same 
manner as tax, by the person failing to provide such notice, an 
amount equal to $10 for each such failure, but the total amount 
imposed on such person for all such failures during any 
calendar year shall not exceed $5,000.
  (i) Failure to give written explanation to recipients of 
certain qualifying rollover distributions.--In the case of each 
failure to provide a written explanation as required by section 
402(f), at the time prescribed therefor, unless it is shown 
that such failure is due to reasonable cause and not to willful 
neglect, there shall be paid, on notice and demand of the 
Secretary and in the same manner as tax, by the person failing 
to provide such written explanation, an amount equal to $100 
for each such failure, but the total amount imposed on such 
person for all such failures during any calendar year shall not 
exceed $50,000.
  (j) Failure to file certification with respect to certain 
residential rental projects.--In the case of each failure to 
provide a certification as required by section 142(d)(7) at the 
time prescribed therefor, unless it is shown that such failure 
is due to reasonable cause and not to willful neglect, there 
shall be paid, on notice and demand of the Secretary and in the 
same manner as tax, by the person failing to provide such 
certification, an amount equal to $100 for each such failure.
  (k)  Failure to make reports required under section 1202.--In 
the case of a failure to make a report required under section 
1202(d)(1)(C) which contains the information required by such 
section on the date prescribed therefor (determined with regard 
to any extension of time for filing), there shall be paid (on 
notice and demand by the Secretary and in the same manner as 
tax) by the person failing to make such report, an amount equal 
to $50 for each report with respect to which there was such a 
failure. In the case of any failure due to negligence or 
intentional disregard, the preceding sentence shall be applied 
by substituting ``$100'' for ``$50''. In the case of a report 
covering periods in 2 or more years, the penalty determined 
under preceding provisions of this subsection shall be 
multiplied by the number of such years. No penalty shall be 
imposed under this subsection on any failure which is shown to 
be due to reasonable cause and not willful neglect.
  (l) Failure to file return with respect to certain corporate 
transactions.--In the case of any failure to make a return 
required under section 6043(c) containing the information 
required by such section on the date prescribed therefor 
(determined with regard to any extension of time for filing), 
unless it is shown that such failure is due to reasonable 
cause, there shall be paid (on notice and demand by the 
Secretary and in the same manner as tax) by the person failing 
to file such return, an amount equal to $500 for each day 
during which such failure continues, but the total amount 
imposed under this subsection with respect to any return shall 
not exceed $100,000.
  (m) Alcohol and tobacco taxes.--For penalties for failure to 
file certain information returns with respect to alcohol and 
tobacco taxes, see, generally, subtitle E.
  (n) Failure to make reports required under sections 3511, 
6053(c)(8), and 7705.--In the case of a failure to make a 
report required under section 3511, 6053(c)(8), or 7705 which 
contains the information required by such section on the date 
prescribed therefor (determined with regard to any extension of 
time for filing), there shall be paid (on notice and demand by 
the Secretary and in the same manner as tax) by the person 
failing to make such report, an amount equal to $50 for each 
report with respect to which there was such a failure. In the 
case of any failure due to negligence or intentional disregard 
the preceding sentence shall be applied by substituting 
``$100'' for ``$50''.
  (o) Failure to provide notices with respect to qualified 
small employer health reimbursement arrangements.--In the case 
of each failure to provide a written notice as required by 
section 9831(d)(4), unless it is shown that such failure is due 
to reasonable cause and not willful neglect, there shall be 
paid, on notice and demand of the Secretary and in the same 
manner as tax, by the person failing to provide such written 
notice, an amount equal to $50 per employee per incident of 
failure to provide such notice, but the total amount imposed on 
such person for all such failures during any calendar year 
shall not exceed $2,500.
  (p) Failure to provide notice under section 83(i).--In the 
case of each failure to provide a notice as required by section 
83(i)(6), at the time prescribed therefor, unless it is shown 
that such failure is due to reasonable cause and not to willful 
neglect, there shall be paid, on notice and demand of the 
Secretary and in the same manner as tax, by the person failing 
to provide such notice, an amount equal to $100 for each such 
failure, but the total amount imposed on such person for all 
such failures during any calendar year shall not exceed 
$50,000.

           *       *       *       *       *       *       *


Subtitle I--Trust Fund Code

           *       *       *       *       *       *       *


CHAPTER 98--TRUST FUND CODE

           *       *       *       *       *       *       *


               Subchapter A--ESTABLISHMENT OF TRUST FUNDS

Sec. 9501. Black Lung Disability Trust Fund.
     * * * * * * *
Sec. 9512. Pension Rehabilitation Trust Fund.

           *       *       *       *       *       *       *


SEC. 9512. PENSION REHABILITATION TRUST FUND.

  (a) Creation of Trust Fund.--There is established in the 
Treasury of the United States a trust fund to be known as the 
``Pension Rehabilitation Trust Fund'' (hereafter in this 
section referred to as the ``Fund''), consisting of such 
amounts as may be appropriated or credited to the Fund as 
provided in this section and section 9602(b).
  (b) Transfers to Fund.--
          (1) Amounts attributable to treasury bonds.--There 
        shall be credited to the Fund the amounts transferred 
        under section 6 of the Rehabilitation for Multiemployer 
        Pensions Act of 2019.
          (2) Loan interest and principal.--
                  (A) In general.--The Director of the Pension 
                Rehabilitation Administration established under 
                section 2 of the Rehabilitation for 
                Multiemployer Pensions Act of 2019 shall 
                deposit in the Fund any amounts received from a 
                plan as payment of interest or principal on a 
                loan under section 4 of such Act.
                  (B) Interest.--For purposes of subparagraph 
                (A), the term ``interest'' includes points and 
                other similar amounts.
          (3) Transfers from secretary.--The Director of the 
        Pension Rehabilitation Administration shall deposit in 
        the Fund any amounts received from the Secretary under 
        section 2(c) of such Act.
          (4) Availability of funds.--Amounts credited to or 
        deposited in the Fund shall remain available until 
        expended.
  (c) Expenditures From Fund.--Amounts in the Fund are 
available without further appropriation to the Pension 
Rehabilitation Administration--
          (1) for the purpose of making the loans described in 
        section 4 of the Rehabilitation for Multiemployer 
        Pensions Act of 2019,
          (2) for the payment of principal and interest on 
        obligations issued under section 6 of such Act, and
          (3) for administrative and operating expenses of such 
        Administration.

           *       *       *       *       *       *       *

                              ----------                              


            EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974



           *       *       *       *       *       *       *
TITLE I--PROTECTION OF EMPLOYEE BENEFIT RIGHTS

           *       *       *       *       *       *       *


Subtitle B--Regulatory Provisions

           *       *       *       *       *       *       *


Part 3--Funding

           *       *       *       *       *       *       *


  Sec. 305. (a) General Rule.--For purposes of this part, in 
the case of a multiemployer plan in effect on July 16, 2006--
          (1) if the plan is in endangered status--
                  (A) the plan sponsor shall adopt and 
                implement a funding improvement plan in 
                accordance with the requirements of subsection 
                (c), and
                  (B) the requirements of subsection (d) shall 
                apply during the funding plan adoption period 
                and the funding improvement period,
          (2) if the plan is in critical status--
                  (A) the plan sponsor shall adopt and 
                implement a rehabilitation plan in accordance 
                with the requirements of subsection (e), and
                  (B) the requirements of subsection (f) shall 
                apply during the rehabilitation plan adoption 
                period and the rehabilitation period, and
          (3) if the plan is in critical and declining status--
                  (A) the requirements of paragraph (2) shall 
                apply to the plan; and
                  (B) the plan sponsor may, by plan amendment, 
                suspend benefits in accordance with the 
                requirements of subsection (e)(9).
  (b) Determination of Endangered and Critical Status.--For 
purposes of this section--
          (1) Endangered status.--A multiemployer plan is in 
        endangered status for a plan year if, as determined by 
        the plan actuary under paragraph (3), the plan is not 
        in critical status for the plan year and is not 
        described in paragraph (5), and, as of the beginning of 
        the plan year, either--
                  (A) the plan's funded percentage for such 
                plan year is less than 80 percent, or
                  (B) the plan has an accumulated funding 
                deficiency for such 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 304(d).
        For purposes of this section, a plan shall be treated 
        as in seriously endangered status for a plan year if 
        the plan is described in both subparagraphs (A) and 
        (B).
          (2) Critical status.--A multiemployer plan is in 
        critical status for a plan year if, as determined by 
        the plan actuary under paragraph (3), the plan is 
        described in 1 or more of the following subparagraphs 
        as of the beginning of the plan year:
                  (A) A plan is described in this subparagraph 
                if--
                          (i) the funded percentage of the plan 
                        is less than 65 percent, and
                          (ii) the sum of--
                                  (I) the fair market value of 
                                plan assets, plus
                                  (II) the present value of the 
                                reasonably anticipated employer 
                                contributions for the current 
                                plan year and each of the 6 
                                succeeding plan years, assuming 
                                that the terms of all 
                                collective bargaining 
                                agreements pursuant to which 
                                the plan is maintained for the 
                                current plan year continue in 
                                effect for succeeding plan 
                                years,
                        is less than the present value of all 
                        nonforfeitable benefits projected to be 
                        payable under the plan during the 
                        current plan year and each of the 6 
                        succeeding plan years (plus 
                        administrative expenses for such plan 
                        years).
                  (B) A plan is described in this subparagraph 
                if--
                          (i) the plan has an accumulated 
                        funding deficiency for the current plan 
                        year, not taking into account any 
                        extension of amortization periods under 
                        section 304(d), or
                          (ii) the plan is projected to have an 
                        accumulated funding deficiency for any 
                        of the 3 succeeding plan years (4 
                        succeeding plan years if the funded 
                        percentage of the plan is 65 percent or 
                        less), not taking into account any 
                        extension of amortization periods under 
                        section 304(d).
                  (C) A plan is described in this subparagraph 
                if--
                          (i)(I) the plan's normal cost for the 
                        current plan year, plus interest 
                        (determined at the rate used for 
                        determining costs under the plan) for 
                        the current plan year on the amount of 
                        unfunded benefit liabilities under the 
                        plan as of the last date of the 
                        preceding plan year, exceeds
                          (II) the present value of the 
                        reasonably anticipated employer and 
                        employee contributions for the current 
                        plan year,
                          (ii) the present value, as of the 
                        beginning of the current plan year, of 
                        nonforfeitable benefits of inactive 
                        participants is greater than the 
                        present value of nonforfeitable 
                        benefits of active participants, and
                          (iii) the plan has an accumulated 
                        funding deficiency for the current plan 
                        year, or is projected to have such a 
                        deficiency for any of the 4 succeeding 
                        plan years, not taking into account any 
                        extension of amortization periods under 
                        section 304(d).
                  (D) A plan is described in this subparagraph 
                if the sum of--
                          (i) the fair market value of plan 
                        assets, plus
                          (ii) the present value of the 
                        reasonably anticipated employer 
                        contributions for the current plan year 
                        and each of the 4 succeeding plan 
                        years, assuming that the terms of all 
                        collective bargaining agreements 
                        pursuant to which the plan is 
                        maintained for the current plan year 
                        continue in effect for succeeding plan 
                        years,
                is less than the present value of all benefits 
                projected to be payable under the plan during 
                the current plan year and each of the 4 
                succeeding plan years (plus administrative 
                expenses for such plan years).
          (3) Annual certification by plan actuary.--
                  (A) In general.--Not later than the 90th day 
                of each plan year of a multiemployer plan, the 
                plan actuary shall certify to the Secretary of 
                the Treasury and to the plan sponsor--
                          (i) whether or not the plan is in 
                        endangered status for such plan year, 
                        whether or not the plan is or will be 
                        in critical status for such plan yearor 
                        for any of the succeeding 5 plan years, 
                        and whether or not the plan is or will 
                        be in critical and declining status for 
                        such plan year, and
                          (ii) in the case of a plan which is 
                        in a funding improvement or 
                        rehabilitation period, whether or not 
                        the plan is making the scheduled 
                        progress in meeting the requirements of 
                        its funding improvement or 
                        rehabilitation plan.
                  (B) Actuarial projections of assets and 
                liabilities.--
                          (i) In general.--Except as provided 
                        in clause (iv), in making the 
                        determinations and projections under 
                        this subsection, the plan actuary shall 
                        make projections required for the 
                        current and succeeding plan years of 
                        the current value of the assets of the 
                        plan and the present value of all 
                        liabilities to participants and 
                        beneficiaries under the plan for the 
                        current plan year as of the beginning 
                        of such year. The actuary's projections 
                        shall be based on reasonable actuarial 
                        estimates, assumptions, and methods 
                        that, except as provided in clause 
                        (iii), offer the actuary's best 
                        estimate of anticipated experience 
                        under the plan. The projected present 
                        value of liabilities as of the 
                        beginning of such year shall be 
                        determined based on the most recent of 
                        either--
                                  (I) the actuarial statement 
                                required under section 103(d) 
                                with respect to the most 
                                recently filed annual report, 
                                or
                                  (II) the actuarial valuation 
                                for the preceding plan year.
                          (ii) Determinations of future 
                        contributions.--Any actuarial 
                        projection of plan assets shall 
                        assume--
                                  (I) reasonably anticipated 
                                employer contributions for the 
                                current and succeeding plan 
                                years, assuming that the terms 
                                of the one or more collective 
                                bargaining agreements pursuant 
                                to which the plan is maintained 
                                for the current plan year 
                                continue in effect for 
                                succeeding plan years, or
                                  (II) that employer 
                                contributions for the most 
                                recent plan year will continue 
                                indefinitely, but only if the 
                                plan actuary determines there 
                                have been no significant 
                                demographic changes that would 
                                make such assumption 
                                unreasonable.
                          (iii) 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, which shall act 
                        reasonably and in good faith.
                          (iv) Projections relating to critical 
                        status in succeeding plan years.--
                        Clauses (i) and (ii) (other than the 
                        2nd sentence of clause (i)) may be 
                        disregarded by a plan actuary in the 
                        case of any certification of whether a 
                        plan will be in critical status in a 
                        succeeding plan year, except that a 
                        plan sponsor may not elect to be in 
                        critical status for a plan year under 
                        paragraph (4) in any case in which the 
                        certification upon which such election 
                        would be based is made without regard 
                        to such clauses.
                          (iv) Projections of critical and 
                        declining status.--In determining 
                        whether a plan is in critical and 
                        declining status as described in 
                        subsection (e)(9), clauses (i), (ii), 
                        and (iii) shall apply, except that--
                                  (I) if reasonable, the plan 
                                actuary shall assume that each 
                                contributing employer in 
                                compliance continues to comply 
                                through the end of the 
                                rehabilitation period or such 
                                later time as provided in 
                                subsection (e)(3)(A)(ii) with 
                                the terms of the rehabilitation 
                                plan that correspond to the 
                                schedule adopted or imposed 
                                under subsection (e), and
                                  (II) the plan actuary shall 
                                take into account any 
                                suspensions of benefits 
                                described in subsection (e)(9) 
                                adopted in a prior plan year 
                                that are still in effect.
                  (C) Penalty for failure to secure timely 
                actuarial certification.--Any failure of the 
                plan's actuary to certify the plan's status 
                under this subsection by the date specified in 
                subparagraph (A) shall be treated for purposes 
                of section 502(c)(2) as a failure or refusal by 
                the plan administrator to file the annual 
                report required to be filed with the Secretary 
                under section 101(b)(1).
                  (D) Notice.--
                          (i) In general.--In any case in which 
                        it is certified under subparagraph (A) 
                        that a multiemployer plan is or will be 
                        in endangered or critical status for a 
                        plan year or in which a plan sponsor 
                        elects to be in critical status for a 
                        plan year under paragraph (4), the plan 
                        sponsor shall, not later than 30 days 
                        after the date of the certification, 
                        provide notification of the endangered 
                        or critical status to the participants 
                        and beneficiaries, the bargaining 
                        parties, the Pension Benefit Guaranty 
                        Corporation, and the Secretary. In any 
                        case in which a plan sponsor elects to 
                        be in critical status for a plan year 
                        under paragraph (4), the plan sponsor 
                        shall notify the Secretary of the 
                        Treasury of such election not later 
                        than 30 days after the date of such 
                        certification or such other time as the 
                        Secretary of the Treasury may prescribe 
                        by regulations or other guidance.
                          (ii) Plans in critical status.--If it 
                        is certified under subparagraph (A) 
                        that a multiemployer plan is or will be 
                        in critical status, the plan sponsor 
                        shall include in the notice under 
                        clause (i) an explanation of the 
                        possibility that--
                                  (I) adjustable benefits (as 
                                defined in subsection (e)(8)) 
                                may be reduced, and
                                  (II) such reductions may 
                                apply to participants and 
                                beneficiaries whose benefit 
                                commencement date is on or 
                                after the date such notice is 
                                provided for the first plan 
                                year in which the plan is in 
                                critical status.
                          (iii) In the case of a multiemployer 
                        plan that would be in endangered status 
                        but for paragraph (5), the plan sponsor 
                        shall provide notice to the bargaining 
                        parties and the Pension Benefit 
                        Guaranty Corporation that the plan 
                        would be in endangered status but for 
                        such paragraph.
                          (iv) Model notice.--The Secretary of 
                        the Treasury, in consultation with the 
                        Secretary shall prescribe a model 
                        notice that a multiemployer plan may 
                        use to satisfy the requirements under 
                        clauses (ii) and (iii).
                           (v) Notice of projection to be in 
                        critical 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 
                        critical status for any of 5 succeeding 
                        plan years (but not for the current 
                        plan year) and the plan sponsor of such 
                        plan has not made an election to be in 
                        critical status for the plan year under 
                        paragraph (4), the plan sponsor shall, 
                        not later than 30 days after the date 
                        of the certification, provide 
                        notification of the projected critical 
                        status to the Pension Benefit Guaranty 
                        Corporation.
          (4) Election to be in critical status.--
        Notwithstanding paragraph (2) and subject to paragraph 
        (3)(B)(iv)--
                  (A) the plan sponsor of a multiemployer plan 
                that is not in critical status for a plan year 
                but that is projected by the plan actuary, 
                pursuant to the determination under paragraph 
                (3), to be in critical status in any of the 
                succeeding 5 plan years may, not later than 30 
                days after the date of the certification under 
                paragraph (3)(A), elect to be in critical 
                status effective for the current plan year,
                  (B) the plan year in which the plan sponsor 
                elects to be in critical status under 
                subparagraph (A) shall be treated for purposes 
                of this section as the first year in which the 
                plan is in critical status, regardless of the 
                date on which the plan first satisfies the 
                criteria for critical status under paragraph 
                (2), and
                  (C) a plan that is in critical status under 
                this paragraph shall not emerge from critical 
                status except in accordance with subsection 
                (e)(4)(B).
          (5) Special rule.--A plan is described in this 
        paragraph if--
                  (A) as part of the actuarial certification of 
                endangered status under paragraph (3)(A) for 
                the plan year, the plan actuary certifies that 
                the plan is projected to no longer be described 
                in either paragraph (1)(A) or paragraph (1)(B) 
                as of the end of the tenth plan year ending 
                after the plan year to which the certification 
                relates, and
                  (B) the plan was not in critical or 
                endangered status for the immediately preceding 
                plan year.
          (6) Critical and declining status.--For purposes of 
        this section, a plan in critical status shall be 
        treated as in critical and declining status if the plan 
        is described in one or more of subparagraphs (A), (B), 
        (C), and (D) of paragraph (2) and the plan is projected 
        to become insolvent within the meaning of section 4245 
        during the current plan year or any of the 14 
        succeeding plan years (19 succeeding plan years if the 
        plan has a ratio of inactive participants to active 
        participants that exceeds 2 to 1 or if the funded 
        percentage of the plan is less than 80 percent).
  (c) Funding Improvement Plan Must Be Adopted for 
Multiemployer Plans in Endangered Status.--
          (1) In general.--In any case in which a multiemployer 
        plan is in endangered status for a plan year, the plan 
        sponsor, in accordance with this subsection--
                  (A) shall adopt a funding improvement plan 
                not later than 240 days following the required 
                date for the actuarial certification of 
                endangered status under subsection (b)(3)(A), 
                and
                  (B) within 30 days after the adoption of the 
                funding improvement plan--
                          (i) 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 applicable benchmarks 
                        in accordance with the funding 
                        improvement plan, including--
                                  (I) one proposal for 
                                reductions in the amount of 
                                future benefit accruals 
                                necessary to achieve the 
                                applicable benchmarks, assuming 
                                no amendments increasing 
                                contributions under the plan 
                                (other than amendments 
                                increasing contributions 
                                necessary to achieve the 
                                applicable benchmarks after 
                                amendments have reduced future 
                                benefit accruals to the maximum 
                                extent permitted by law), and
                                  (II) one proposal for 
                                increases in contributions 
                                under the plan necessary to 
                                achieve the applicable 
                                benchmarks, assuming no 
                                amendments reducing future 
                                benefit accruals under the 
                                plan, and
                          (ii) may, if the plan sponsor deems 
                        appropriate, prepare and provide the 
                        bargaining parties with additional 
                        information relating to contribution 
                        rates or benefit reductions, 
                        alternative schedules, or other 
                        information relevant to achieving the 
                        applicable benchmarks in accordance 
                        with the funding improvement plan.
                For purposes of this section, the term 
                ``applicable benchmarks'' means the 
                requirements applicable to the multiemployer 
                plan under paragraph (3) (as modified by 
                paragraph (5)).
          (2) Exception for years after process begins.--
        Paragraph (1) shall not apply to a plan year if such 
        year is in a funding plan adoption period or funding 
        improvement period by reason of the plan being in 
        endangered status for a preceding plan year. For 
        purposes of this section, such preceding plan year 
        shall be the initial determination year with respect to 
        the funding improvement plan to which it relates.
          (3) Funding improvement plan.--For purposes of this 
        section--
                  (A) In general.--A funding improvement plan 
                is a plan which consists of the actions, 
                including options or a range of options to be 
                proposed to the bargaining parties, formulated 
                to provide, based on reasonably anticipated 
                experience and reasonable actuarial 
                assumptions, for the attainment by the plan 
                during the funding improvement period of the 
                following requirements:
                          (i) Increase in plan's funding 
                        percentage.--The plan's funded 
                        percentage as of the close of the 
                        funding improvement period equals or 
                        exceeds a percentage equal to the sum 
                        of--
                                  (I) such percentage as of the 
                                beginning of the first plan 
                                year for which the plan is 
                                certified to be in endangered 
                                status pursuant to paragraph 
                                (b)(3), plus
                                  (II) 33 percent of the 
                                difference between 100 percent 
                                and the percentage under 
                                subclause (I).
                          (ii) Avoidance of accumulated funding 
                        deficiencies.--No accumulated funding 
                        deficiency for the last plan year 
                        during the funding improvement period 
                        (taking into account any extension of 
                        amortization periods under section 
                        304(d)).
                  (B) Seriously endangered plans.--In the case 
                of a plan in seriously endangered status, 
                except as provided in paragraph (5), 
                subparagraph (A)(i)(II) shall be applied by 
                substituting ``20 percent'' for ``33 percent''.
          (4) Funding improvement period.--For purposes of this 
        section--
                  (A) In general.--The funding improvement 
                period for any funding improvement plan adopted 
                pursuant to this subsection is the 10-year 
                period 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 funding 
                        improvement plan, or
                          (ii) the expiration of the collective 
                        bargaining agreements in effect on the 
                        due date for the actuarial 
                        certification of endangered status for 
                        the initial determination year under 
                        subsection (b)(3)(A) and covering, as 
                        of such due date, at least 75 percent 
                        of the active participants in such 
                        multiemployer plan.
                  (B) Seriously endangered plans.--In the case 
                of a plan in seriously endangered status, 
                except as provided in paragraph (5), 
                subparagraph (A) shall be applied by 
                substituting ``15-year period'' for ``10-year 
                period''.
                  (C) Coordination with changes in status.--
                          (i) Plans no longer in endangered 
                        status.--If the plan's actuary 
                        certifies under subsection (b)(3)(A) 
                        for a plan year in any funding plan 
                        adoption period or funding improvement 
                        period that the plan is no longer in 
                        endangered status and is not in 
                        critical status, the funding plan 
                        adoption period or funding improvement 
                        period, whichever is applicable, shall 
                        end as of the close of the preceding 
                        plan year.
                          (ii) Plans in critical status.--If 
                        the plan's actuary certifies under 
                        subsection (b)(3)(A) for a plan year in 
                        any funding plan adoption period or 
                        funding improvement period that the 
                        plan is in critical status, the funding 
                        plan adoption period or funding 
                        improvement period, whichever is 
                        applicable, shall end as of the close 
                        of the plan year preceding the first 
                        plan year in the rehabilitation period 
                        with respect to such status.
                  (D) Plans in endangered status at end of 
                period.--If the plan's actuary certifies under 
                subsection (b)(3)(A) for the first plan year 
                following the close of the period described in 
                subparagraph (A) that the plan is in endangered 
                status, the provisions of this subsection and 
                subsection (d) shall be applied as if such 
                first plan year were an initial determination 
                year, except that the plan may not be amended 
                in a manner inconsistent with the funding 
                improvement plan in effect for the preceding 
                plan year until a new funding improvement plan 
                is adopted.
          (5) Special rules for seriously endangered plans more 
        than 70 percent funded.--
                  (A) In general.--If the funded percentage of 
                a plan in seriously endangered status was more 
                than 70 percent as of the beginning of the 
                initial determination year--
                          (i) paragraphs (3)(B) and (4)(B) 
                        shall apply only if the plan's actuary 
                        certifies, within 30 days after the 
                        certification under subsection 
                        (b)(3)(A) for the initial determination 
                        year, that, based on the terms of the 
                        plan and the collective bargaining 
                        agreements in effect at the time of 
                        such certification, the plan is not 
                        projected to meet the requirements of 
                        paragraph (3)(A) (without regard to 
                        paragraphs (3)(B) and (4)(B)), and
                          (ii) if there is a certification 
                        under clause (i), the plan may, in 
                        formulating its funding improvement 
                        plan, only take into account the rules 
                        of paragraph (3)(B) and (4)(B) for plan 
                        years in the funding improvement period 
                        beginning on or before the date on 
                        which the last of the collective 
                        bargaining agreements described in 
                        paragraph (4)(A)(ii) expires.
                  (B) Special rule after expiration of 
                agreements.--Notwithstanding subparagraph 
                (A)(ii), if, for any plan year ending after the 
                date described in subparagraph (A)(ii), the 
                plan actuary certifies (at the time of the 
                annual certification under subsection (b)(3)(A) 
                for such plan year) that, based on the terms of 
                the plan and collective bargaining agreements 
                in effect at the time of that annual 
                certification, the plan is not projected to be 
                able to meet the requirements of paragraph 
                (3)(A) (without regard to paragraphs (3)(B) and 
                (4)(B)), paragraphs (3)(B) and (4)(B) shall 
                continue to apply for such year.
          (6) Updates to funding improvement plan and 
        schedules.--
                  (A) Funding improvement plan.--The plan 
                sponsor shall annually update the funding 
                improvement 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.
                  (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.
          (7) Imposition of schedule where failure to adopt 
        funding improvement 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 endangered 
                        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 funding 
                        improvement plan and a schedule from 
                        the plan sponsor,
                the plan sponsor shall implement the schedule 
                described in paragraph (1)(B)(i)(I) beginning 
                on the date specified in subparagraph (C).
                  (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 funding improvement plan 
                        (or imposed under subparagraph (A)) 
                        expires while the plan is still in 
                        endangered status, and
                          (ii) after receiving one or more 
                        updated schedules from the plan sponsor 
                        under paragraph (6)(B), the bargaining 
                        parties with respect to such agreement 
                        fail to adopt a contribution schedule 
                        with terms consistent with the updated 
                        funding improvement plan and a schedule 
                        from the plan sponsor,
                then the contribution schedule applicable under 
                the expired collective bargaining agreement, as 
                updated and in effect on the date the 
                collective bargaining agreement expires, shall 
                be implemented by the plan sponsor beginning on 
                the date specified in subparagraph (C).
                  (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.
                  (D) Failure to make scheduled 
                contributions.--Any failure to make a 
                contribution under a schedule of contribution 
                rates provided under this paragraph shall be 
                treated as a delinquent contribution under 
                section 515 and shall be enforceable as such.
          (8) Funding plan adoption period.--For purposes of 
        this section, the term ``funding plan adoption period'' 
        means the period beginning on the date of the 
        certification under subsection (b)(3)(A) for the 
        initial determination year and ending on the day before 
        the first day of the funding improvement period.
  (d) Rules for Operation of Plan During Adoption and 
Improvement Periods.--
          (1) Compliance with funding improvement plan.--
                  (A) In general.--A plan may not be amended 
                after the date of the adoption of a funding 
                improvement plan under subsection (c) so as to 
                be inconsistent with the funding improvement 
                plan.
                  (B) Special rules for benefit increases.--A 
                plan may not be amended after the date of the 
                adoption of a funding improvement plan under 
                subsection (c) so as to increase benefits, 
                including future benefit accruals, unless the 
                plan actuary certifies that such increase is 
                paid for out of additional contributions not 
                contemplated by the funding improvement plan, 
                and, after taking into account the benefit 
                increase, the multiemployer plan still is 
                reasonably expected to meet the applicable 
                benchmark on the schedule contemplated in the 
                funding improvement plan.
          (2) Special rules for plan adoption period.--During 
        the period beginning on the date of the certification 
        under subsection (b)(3)(A) for the initial 
        determination year and ending on the date of the 
        adoption of a funding improvement 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, and
                  (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 of the Internal 
                Revenue Code of 1986 or to comply with other 
                applicable law.
  (e) Rehabilitation Plan Must Be Adopted for Multiemployer 
Plans in Critical Status.--
          (1) In general.--In any case in which a multiemployer 
        plan is in critical status for a plan year, the plan 
        sponsor, in accordance with this subsection--
                  (A) shall adopt a rehabilitation plan not 
                later than 240 days following the required date 
                for the actuarial certification of critical 
                status under subsection (b)(3)(A), and
                  (B) within 30 days after the adoption of the 
                rehabilitation plan--
                          (i) 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 emerge from critical status in 
                        accordance with the rehabilitation 
                        plan, and
                          (ii) may, if the plan sponsor deems 
                        appropriate, prepare and provide the 
                        bargaining parties with additional 
                        information relating to contribution 
                        rates or benefit reductions, 
                        alternative schedules, or other 
                        information relevant to emerging from 
                        critical status in accordance with the 
                        rehabilitation plan.
        The schedule or schedules described in subparagraph 
        (B)(i) shall reflect reductions in future benefit 
        accruals and adjustable benefits, and increases in 
        contributions, that the plan sponsor determines are 
        reasonably necessary to emerge from critical status. 
        One schedule shall be designated as the default 
        schedule and such schedule shall assume that there are 
        no increases in contributions under the plan other than 
        the increases necessary to emerge from critical status 
        after future benefit accruals and other benefits (other 
        than benefits the reduction or elimination of which are 
        not permitted under section 204(g)) have been reduced 
        to the maximum extent permitted by law.
          (2) Exception for years after process begins.--
        Paragraph (1) shall not apply to a plan year if such 
        year is in a rehabilitation plan adoption period or 
        rehabilitation period by reason of the plan being in 
        critical status for a preceding plan year. For purposes 
        of this section, such preceding plan year shall be the 
        initial critical year with respect to the 
        rehabilitation plan to which it relates.
          (3) Rehabilitation plan.--For purposes of this 
        section--
                  (A) In general.--A rehabilitation plan is a 
                plan which consists of--
                          (i) 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 cease to be in 
                        critical status by the end of the 
                        rehabilitation period and may include 
                        reductions in plan expenditures 
                        (including plan mergers and 
                        consolidations), reductions in future 
                        benefit accruals or increases in 
                        contributions, if agreed to by the 
                        bargaining parties, or any combination 
                        of such actions, or
                          (ii) if the plan sponsor determines 
                        that, based on reasonable actuarial 
                        assumptions and upon exhaustion of all 
                        reasonable measures, the plan can not 
                        reasonably be expected to emerge from 
                        critical status by the end of the 
                        rehabilitation period, reasonable 
                        measures to emerge from critical status 
                        at a later time or to forestall 
                        possible insolvency (within the meaning 
                        of section 4245).
                A rehabilitation plan must provide annual 
                standards for meeting the requirements of such 
                rehabilitation plan. Such plan shall also 
                include the schedules required to be provided 
                under paragraph (1)(B)(i) and if clause (ii) 
                applies, shall set forth the alternatives 
                considered, explain why the plan is not 
                reasonably expected to emerge from critical 
                status by the end of the rehabilitation period, 
                and specify when, if ever, the plan is expected 
                to emerge from critical status in accordance 
                with the rehabilitation plan.
                  (B) Updates to rehabilitation plan and 
                schedules.--
                          (i) Rehabilitation plan.--The plan 
                        sponsor shall annually update the 
                        rehabilitation plan and shall file the 
                        update with the plan's annual report 
                        under section 104.
                          (ii) Schedules.--The plan sponsor 
                        shall annually update any schedule of 
                        contribution rates provided under this 
                        subsection to reflect the experience of 
                        the plan.
                          (iii) 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.
                  (C) Imposition of schedule where failure to 
                adopt rehabilitation plan.--
                          (i) 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 critical 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 rehabilitation plan 
                                and a schedule from the plan 
                                sponsor under paragraph 
                                (1)(B)(i),
                        the plan sponsor shall implement the 
                        schedule described in the last sentence 
                        of paragraph (1) beginning on the date 
                        specified in clause (iii).
                          (ii) 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 rehabilitation 
                                plan (or imposed under 
                                subparagraph (C)(i)) expires 
                                while the plan is still in 
                                critical status, and
                                  (II) after receiving one or 
                                more updated schedules from the 
                                plan sponsor under subparagraph 
                                (B)(ii), the bargaining parties 
                                with respect to such agreement 
                                fail to adopt a contribution 
                                schedule with terms consistent 
                                with the updated rehabilitation 
                                plan and a schedule from the 
                                plan sponsor,
                        then the contribution schedule 
                        applicable under the expired collective 
                        bargaining agreement, as updated and in 
                        effect on the date the collective 
                        bargaining agreement expires, shall be 
                        implemented by the plan sponsor 
                        beginning on the date specified in 
                        clause (iii).
                          (iii) 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 clause (i) or 
                        (ii) expires.
                          (iv) Failure to make scheduled 
                        contributions.--Any failure to make a 
                        contribution under a schedule of 
                        contribution rates provided under this 
                        subsection shall be treated as a 
                        delinquent contribution under section 
                        515 and shall be enforceable as such.
          (4) Rehabilitation period.--For purposes of this 
        section--
                  (A) In general.--The rehabilitation period 
                for a plan in critical status is the 10-year 
                period beginning on the first day of the first 
                plan year of the multiemployer plan following 
                the earlier of--
                          (i) the second anniversary of the 
                        date of the adoption of the 
                        rehabilitation plan, or
                          (ii) the expiration of the collective 
                        bargaining agreements in effect on the 
                        due date for the actuarial 
                        certification of critical status for 
                        the initial critical year under 
                        subsection (a)(1) and covering, as of 
                        such date at least 75 percent of the 
                        active participants in such 
                        multiemployer plan.
                If a plan emerges from critical status as 
                provided under subparagraph (B) before the end 
                of such 10-year period, the rehabilitation 
                period shall end with the plan year preceding 
                the plan year for which the determination under 
                subparagraph (B) is made.
                  (B) Emergence.--
                          (i) In general.--A plan in critical 
                        status shall remain in such status 
                        until a plan year for which the plan 
                        actuary certifies, in accordance with 
                        subsection (b)(3)(A), that--
                                  (I) the plan is not described 
                                in one or more of the 
                                subparagraphs in subsection 
                                (b)(2) as of the beginning of 
                                the plan year;
                                  (II) the plan is not 
                                projected to have an 
                                accumulated funding deficiency 
                                for the plan year or any of the 
                                9 succeeding plan years, 
                                without regard to the use of 
                                the shortfall method but taking 
                                into account any extension of 
                                amortization periods under 
                                section 304(d)(2) or section 
                                304 (as in effect prior to the 
                                enactment of the Pension 
                                Protection Act of 2006); and
                                  (III) the plan is not 
                                projected to become insolvent 
                                within the meaning of section 
                                4245 for any of the 30 
                                succeeding plan years.
                          (ii) Plans with certain amortization 
                        extensions.--
                                  (I) Special emergence rule.--
                                Notwithstanding clause (i), a 
                                plan in critical status that 
                                has an automatic extension of 
                                amortization periods under 
                                section 304(d)(1) shall no 
                                longer be in critical status if 
                                the plan actuary certifies for 
                                a plan year, in accordance with 
                                subsection (b)(3)(A), that--
                                          (aa) the plan is not 
                                        projected to have an 
                                        accumulated funding 
                                        deficiency for the plan 
                                        year or any of the 9 
                                        succeeding plan years, 
                                        without regard to the 
                                        use of the shortfall 
                                        method but taking into 
                                        account any extension 
                                        of amortization periods 
                                        under section 
                                        304(d)(1); and
                                          (bb) the plan is not 
                                        projected to become 
                                        insolvent within the 
                                        meaning of section 4245 
                                        for any of the 30 
                                        succeeding plan years,
                                regardless of whether the plan 
                                is described in one or more of 
                                the subparagraphs in subsection 
                                (b)(2) as of the beginning of 
                                the plan year.
                                  (II) Reentry into critical 
                                status.--A plan that emerges 
                                from critical status under 
                                subclause (I) shall not reenter 
                                critical status for any 
                                subsequent plan year unless--
                                          (aa) the plan is 
                                        projected to have an 
                                        accumulated funding 
                                        deficiency for the plan 
                                        year or any of the 9 
                                        succeeding plan years, 
                                        without regard to the 
                                        use of the shortfall 
                                        method but taking into 
                                        account any extension 
                                        of amortization periods 
                                        under section 304(d); 
                                        or
                                          (bb) the plan is 
                                        projected to become 
                                        insolvent within the 
                                        meaning of section 4245 
                                        for any of the 30 
                                        succeeding plan years.
          (5) Rehabilitation plan adoption period.--For 
        purposes of this section, the term ``rehabilitation 
        plan adoption period'' means the period beginning on 
        the date of the certification under subsection 
        (b)(3)(A) for the initial critical year and ending on 
        the day before the first day of the rehabilitation 
        period.
          (6) Limitation on reduction in rates of future 
        accruals.--Any reduction in the rate of future accruals 
        under the default schedule described in the last 
        sentence of paragraph (1) shall not reduce the rate of 
        future accruals below--
                  (A) a monthly benefit (payable as a single 
                life annuity commencing at the participant's 
                normal retirement age) equal to 1 percent of 
                the contributions required to be made with 
                respect to a participant, or the equivalent 
                standard accrual rate for a participant or 
                group of participants under the collective 
                bargaining agreements in effect as of the first 
                day of the initial critical year, or
                  (B) if lower, the accrual rate under the plan 
                on such first day.
        The equivalent standard accrual rate shall be 
        determined by the plan sponsor based on the standard or 
        average contribution base units which the plan sponsor 
        determines to be representative for active participants 
        and such other factors as the plan sponsor determines 
        to be relevant. Nothing in this paragraph shall be 
        construed as limiting the ability of the plan sponsor 
        to prepare and provide the bargaining parties with 
        alternative schedules to the default schedule that 
        establish lower or higher accrual and contribution 
        rates than the rates otherwise described in this 
        paragraph.
          (7) Automatic employer surcharge.--
                  (A) Imposition of surcharge.--Each employer 
                otherwise obligated to make contributions for 
                the initial critical year shall be obligated to 
                pay to the plan for such year a surcharge equal 
                to 5 percent of the contributions otherwise 
                required under the applicable collective 
                bargaining agreement (or other agreement 
                pursuant to which the employer contributes). 
                For each succeeding plan year in which the plan 
                is in critical status for a consecutive period 
                of years beginning with the initial critical 
                year, the surcharge shall be 10 percent of the 
                contributions otherwise so required.
                  (B) Enforcement of surcharge.--The surcharges 
                under subparagraph (A) shall be due and payable 
                on the same schedule as the contributions on 
                which the surcharges are based. Any failure to 
                make a surcharge payment shall be treated as a 
                delinquent contribution under section 515 and 
                shall be enforceable as such.
                  (C) Surcharge to terminate upon collective 
                bargaining agreement renegotiation.--The 
                surcharge under this paragraph shall cease to 
                be effective with respect to employees covered 
                by a collective bargaining agreement (or other 
                agreement pursuant to which the employer 
                contributes), beginning on the effective date 
                of a collective bargaining agreement (or other 
                such agreement) that includes terms consistent 
                with a schedule presented by the plan sponsor 
                under paragraph (1)(B)(i), as modified under 
                subparagraph (B) of paragraph (3).
                  (D) Surcharge not to apply until employer 
                receives notice.--The surcharge under this 
                paragraph shall not apply to an employer until 
                30 days after the employer has been notified by 
                the plan sponsor that the plan is in critical 
                status and that the surcharge is in effect.
                  (E) Surcharge not to generate increased 
                benefit accruals.--Notwithstanding any 
                provision of a plan to the contrary, the amount 
                of any surcharge under this paragraph shall not 
                be the basis for any benefit accrual under the 
                plan.
          (8) Benefit adjustments.--
                  (A) Adjustable benefits.--
                          (i) In general.--Notwithstanding 
                        section 204(g), the plan sponsor shall, 
                        subject to the notice requirements in 
                        subparagraph (C), make any reductions 
                        to adjustable benefits which the plan 
                        sponsor deems appropriate, based upon 
                        the outcome of collective bargaining 
                        over the schedule or schedules provided 
                        under paragraph (1)(B)(i).
                          (ii) Exception for retirees.--Except 
                        in the case of adjustable benefits 
                        described in clause (iv)(III), the plan 
                        sponsor of a plan in critical status 
                        shall not reduce adjustable benefits of 
                        any participant or beneficiary whose 
                        benefit commencement date is before the 
                        date on which the plan provides notice 
                        to the participant or beneficiary under 
                        subsection (b)(3)(D) for the initial 
                        critical year.
                          (iii) Plan sponsor flexibility.--The 
                        plan sponsor shall include in the 
                        schedules provided to the bargaining 
                        parties an allowance for funding the 
                        benefits of participants with respect 
                        to whom contributions are not currently 
                        required to be made, and shall reduce 
                        their benefits to the extent permitted 
                        under this title and considered 
                        appropriate by the plan sponsor based 
                        on the plan's then current overall 
                        funding status.
                          (iv) Adjustable benefit defined.--For 
                        purposes of this paragraph, the term 
                        ``adjustable benefit'' means--
                                  (I) benefits, rights, and 
                                features under the plan, 
                                including post-retirement death 
                                benefits, 60-month guarantees, 
                                disability benefits not yet in 
                                pay status, and similar 
                                benefits,
                                  (II) any early retirement 
                                benefit or retirement-type 
                                subsidy (within the meaning of 
                                section 204(g)(2)(A)) and any 
                                benefit payment option (other 
                                than the qualified joint and 
                                survivor annuity), and
                                  (III) benefit increases that 
                                would not be eligible for a 
                                guarantee under section 4022A 
                                on the first day of initial 
                                critical year because the 
                                increases were adopted (or, if 
                                later, took effect) less than 
                                60 months before such first 
                                day.
                  (B) Normal retirement benefits protected.--
                Except as provided in subparagraph 
                (A)(iv)(III), nothing in this paragraph shall 
                be construed to permit a plan to reduce the 
                level of a participant's accrued benefit 
                payable at normal retirement age.
                  (C) Notice requirements.--
                          (i) In general.--No reduction may be 
                        made to adjustable benefits under 
                        subparagraph (A) unless notice of such 
                        reduction has been given at least 30 
                        days before the general effective date 
                        of such reduction for all participants 
                        and beneficiaries to--
                                  (I) plan participants and 
                                beneficiaries,
                                  (II) each employer who has an 
                                obligation to contribute 
                                (within the meaning of section 
                                4212(a)) under the plan, and
                                  (III) each employee 
                                organization which, for 
                                purposes of collective 
                                bargaining, represents plan 
                                participants employed by such 
                                an employer.
                          (ii) Content of notice.--The notice 
                        under clause (i) shall contain--
                                  (I) sufficient information to 
                                enable participants and 
                                beneficiaries to understand the 
                                effect of any reduction on 
                                their benefits, including an 
                                estimate (on an annual or 
                                monthly basis) of any affected 
                                adjustable benefit that a 
                                participant or beneficiary 
                                would otherwise have been 
                                eligible for as of the general 
                                effective date described in 
                                clause (i), and
                                  (II) information as to the 
                                rights and remedies of plan 
                                participants and beneficiaries 
                                as well as how to contact the 
                                Department of Labor for further 
                                information and assistance 
                                where appropriate.
                          (iii) Form and manner.--Any notice 
                        under clause (i)--
                                  (I) shall be provided in a 
                                form and manner prescribed in 
                                regulations of the Secretary of 
                                the Treasury, in consultation 
                                with the Secretary,
                                  (II) shall be written in a 
                                manner so as to be understood 
                                by the average plan 
                                participant, and
                                  (III) may be provided in 
                                written, electronic, or other 
                                appropriate form to the extent 
                                such form is reasonably 
                                accessible to persons to whom 
                                the notice is required to be 
                                provided.
                        The Secretary of the Treasury shall in 
                        the regulations prescribed under 
                        subclause (I) establish a model notice 
                        that a plan sponsor may use to meet the 
                        requirements of this subparagraph.
          (9) Benefit suspensions for multiemployer plans in 
        critical and declining status.--
                  (A) In general.--Notwithstanding section 
                204(g) and subject to subparagraphs (B) through 
                (I), the plan sponsor of a plan in critical and 
                declining status may, by plan amendment, 
                suspend benefits which the sponsor deems 
                appropriate.
                  (B) Suspension of benefits.--
                          (i) Suspension of benefits defined.--
                        For purposes of this subsection, the 
                        term ``suspension of benefits'' means 
                        the temporary or permanent reduction of 
                        any current or future payment 
                        obligation of the plan to any 
                        participant or beneficiary under the 
                        plan, whether or not in pay status at 
                        the time of the suspension of benefits.
                          (ii) Length of suspensions.--Any 
                        suspension of benefits made under 
                        subparagraph (A) shall remain in effect 
                        until the earlier of when the plan 
                        sponsor provides benefit improvements 
                        in accordance with subparagraph (E) or 
                        the suspension of benefits expires by 
                        its own terms.
                          (iii) No liability.--The plan shall 
                        not be liable for any benefit payments 
                        not made as a result of a suspension of 
                        benefits under this paragraph.
                          (iv) Applicability.--For purposes of 
                        this paragraph, all references to 
                        suspensions of benefits, increases in 
                        benefits, or resumptions of suspended 
                        benefits with respect to participants 
                        shall also apply with respect to 
                        benefits of beneficiaries or 
                        alternative payees of participants.
                          (v) Retiree representative.--
                                  (I) In general.--In the case 
                                of a plan with 10,000 or more 
                                participants, not later than 60 
                                days prior to the plan sponsor 
                                submitting an application to 
                                suspend benefits, the plan 
                                sponsor shall select a 
                                participant of the plan in pay 
                                status to act as a retiree 
                                representative. The retiree 
                                representative shall advocate 
                                for the interests of the 
                                retired and deferred vested 
                                participants and beneficiaries 
                                of the plan throughout the 
                                suspension approval process.
                                  (II) Reasonable expenses from 
                                plan.--The plan shall provide 
                                for reasonable expenses by the 
                                retiree representative, 
                                including reasonable legal and 
                                actuarial support, commensurate 
                                with the plan's size and funded 
                                status.
                                  (III) Special rule relating 
                                to fiduciary status.--Duties 
                                performed pursuant to subclause 
                                (I) shall not be subject to 
                                section 404(a). The preceding 
                                sentence shall not apply to 
                                those duties associated with an 
                                application to suspend benefits 
                                pursuant to subparagraph (G) 
                                that are performed by the 
                                retiree representative who is 
                                also a plan trustee.
                  (C) Conditions for suspensions.--The plan 
                sponsor of a plan in critical and declining 
                status for a plan year may suspend benefits 
                only if the following conditions are met:
                          (i) Taking into account the proposed 
                        suspensions of benefits (and, if 
                        applicable, a proposed partition of the 
                        plan under section 4233), the plan 
                        actuary certifies that the plan is 
                        projected to avoid insolvency within 
                        the meaning of section 4245, assuming 
                        the suspensions of benefits continue 
                        until the suspensions of benefits 
                        expire by their own terms or if no such 
                        expiration date is set, indefinitely.
                          (ii) The plan sponsor determines, in 
                        a written record to be maintained 
                        throughout the period of the benefit 
                        suspension, that the plan is still 
                        projected to become insolvent unless 
                        benefits are suspended under this 
                        paragraph, although all reasonable 
                        measures to avoid insolvency have been 
                        taken (and continue to be taken during 
                        the period of the benefit suspension). 
                        In its determination, the plan sponsor 
                        may take into account factors including 
                        the following:
                                  (I) Current and past 
                                contribution levels.
                                  (II) Levels of benefit 
                                accruals (including any prior 
                                reductions in the rate of 
                                benefit accruals).
                                  (III) Prior reductions (if 
                                any) of adjustable benefits.
                                  (IV) Prior suspensions (if 
                                any) of benefits under this 
                                subsection.
                                  (V) The impact on plan 
                                solvency of the subsidies and 
                                ancillary benefits available to 
                                active participants.
                                  (VI) Compensation levels of 
                                active participants relative to 
                                employees in the participants' 
                                industry generally.
                                  (VII) Competitive and other 
                                economic factors facing 
                                contributing employers.
                                  (VIII) The impact of benefit 
                                and contribution levels on 
                                retaining active participants 
                                and bargaining groups under the 
                                plan.
                                  (IX) The impact of past and 
                                anticipated contribution 
                                increases under the plan on 
                                employer attrition and 
                                retention levels.
                                  (X) Measures undertaken by 
                                the plan sponsor to retain or 
                                attract contributing employers.
                  (D) Limitations on suspensions.--Any 
                suspensions of benefits made by a plan sponsor 
                pursuant to this paragraph shall be subject to 
                the following limitations:
                          (i) The monthly benefit of any 
                        participant or beneficiary may not be 
                        reduced below 110 percent of the 
                        monthly benefit which is guaranteed by 
                        the Pension Benefit Guaranty 
                        Corporation under section 4022A on the 
                        date of the suspension.
                          (ii)(I) In the case of a participant 
                        or beneficiary who has attained 75 
                        years of age as of the effective date 
                        of the suspension, not more than the 
                        applicable percentage of the maximum 
                        suspendable benefits of such 
                        participant or beneficiary may be 
                        suspended under this paragraph.
                          (II) For purposes of subclause (I), 
                        the maximum suspendable benefits of a 
                        participant or beneficiary is the 
                        portion of the benefits of such 
                        participant or beneficiary that would 
                        be suspended pursuant to this paragraph 
                        without regard to this clause;
                          (III) For purposes of subclause (I), 
                        the applicable percentage is a 
                        percentage equal to the quotient 
                        obtained by dividing--
                                  (aa) the number of months 
                                during the period beginning 
                                with the month after the month 
                                in which occurs the effective 
                                date of the suspension and 
                                ending with the month during 
                                which the participant or 
                                beneficiary attains the age of 
                                80, by
                                  (bb) 60 months.
                          (iii) No benefits based on disability 
                        (as defined under the plan) may be 
                        suspended under this paragraph.
                          (iv) Any suspensions of benefits, in 
                        the aggregate (and, if applicable, 
                        considered in combination with a 
                        partition of the plan under section 
                        4233), shall be reasonably estimated to 
                        achieve, but not materially exceed, the 
                        level that is necessary to avoid 
                        insolvency.
                          (v) In any case in which a suspension 
                        of benefits with respect to a plan is 
                        made in combination with a partition of 
                        the plan under section 4233, the 
                        suspension of benefits may not take 
                        effect prior to the effective date of 
                        such partition.
                          (vi) Any suspensions of benefits 
                        shall be equitably distributed across 
                        the participant and beneficiary 
                        population, taking into account 
                        factors, with respect to participants 
                        and beneficiaries and their benefits, 
                        that may include one or more of the 
                        following:
                                  (I) Age and life expectancy.
                                  (II) Length of time in pay 
                                status.
                                  (III) Amount of benefit.
                                  (IV) Type of benefit: 
                                survivor, normal retirement, 
                                early retirement.
                                  (V) Extent to which 
                                participant or beneficiary is 
                                receiving a subsidized benefit.
                                  (VI) Extent to which 
                                participant or beneficiary has 
                                received post-retirement 
                                benefit increases.
                                  (VII) History of benefit 
                                increases and reductions.
                                  (VIII) Years to retirement 
                                for active employees.
                                  (IX) Any discrepancies 
                                between active and retiree 
                                benefits.
                                  (X) Extent to which active 
                                participants are reasonably 
                                likely to withdraw support for 
                                the plan, accelerating employer 
                                withdrawals from the plan and 
                                increasing the risk of 
                                additional benefit reductions 
                                for participants in and out of 
                                pay status.
                                  (XI) Extent to which benefits 
                                are attributed to service with 
                                an employer that failed to pay 
                                its full withdrawal liability.
                          (vii) In the case of a plan that 
                        includes the benefits described in 
                        clause (III), benefits suspended under 
                        this paragraph shall--
                                  (I) first, be applied to the 
                                maximum extent permissible to 
                                benefits attributable to a 
                                participant's service for an 
                                employer which withdrew from 
                                the plan and failed to pay (or 
                                is delinquent with respect to 
                                paying) the full amount of its 
                                withdrawal liability under 
                                section 4201(b)(1) or an 
                                agreement with the plan,
                                  (II) second, except as 
                                provided by subclause (III), be 
                                applied to all other benefits 
                                that may be suspended under 
                                this paragraph, and
                                  (III) third, be applied to 
                                benefits under a plan that are 
                                directly attributable to a 
                                participant's service with any 
                                employer which has, prior to 
                                the date of enactment of the 
                                Multiemployer Pension Reform 
                                Act of 2014--
                                          (aa) withdrawn from 
                                        the plan in a complete 
                                        withdrawal under 
                                        section 4203 and has 
                                        paid the full amount of 
                                        the employer's 
                                        withdrawal liability 
                                        under section 
                                        4201(b)(1) or an 
                                        agreement with the 
                                        plan, and
                                          (bb) pursuant to a 
                                        collective bargaining 
                                        agreement, assumed 
                                        liability for providing 
                                        benefits to 
                                        participants and 
                                        beneficiaries of the 
                                        plan under a separate, 
                                        single-employer plan 
                                        sponsored by the 
                                        employer, in an amount 
                                        equal to any amount of 
                                        benefits for such 
                                        participants and 
                                        beneficiaries reduced 
                                        as a result of the 
                                        financial status of the 
                                        plan.
                  (E) Benefit improvements.--
                          (i) In general.--The plan sponsor 
                        may, in its sole discretion, provide 
                        benefit improvements while any 
                        suspension of benefits under the plan 
                        remains in effect, except that the plan 
                        sponsor may not increase the 
                        liabilities of the plan by reason of 
                        any benefit improvement for any 
                        participant or beneficiary not in pay 
                        status by the first day of the plan 
                        year for which the benefit improvement 
                        takes effect, unless--
                                  (I) such action is 
                                accompanied by equitable 
                                benefit improvements in 
                                accordance with clause (ii) for 
                                all participants and 
                                beneficiaries whose benefit 
                                commencement dates were before 
                                the first day of the plan year 
                                for which the benefit 
                                improvement for such 
                                participant or beneficiary not 
                                in pay status took effect; and
                                  (II) the plan actuary 
                                certifies that after taking 
                                into account such benefits 
                                improvements the plan is 
                                projected to avoid insolvency 
                                indefinitely under section 
                                4245.
                          (ii) Equitable distribution of 
                        benefit improvements.--
                                  (I) Limitation.--The 
                                projected value of the total 
                                liabilities for benefit 
                                improvements for participants 
                                and beneficiaries not in pay 
                                status by the date of the first 
                                day of the plan year in which 
                                the benefit improvements are 
                                proposed to take effect, as 
                                determined as of such date, may 
                                not exceed the projected value 
                                of the liabilities arising from 
                                benefit improvements for 
                                participants and beneficiaries 
                                with benefit commencement dates 
                                prior to the first day of such 
                                plan year, as so determined.
                                  (II) Equitable distribution 
                                of benefits.--The plan sponsor 
                                shall equitably distribute any 
                                increase in total liabilities 
                                for benefit improvements in 
                                clause (i) to some or all of 
                                the participants and 
                                beneficiaries whose benefit 
                                commencement date is before the 
                                date of the first day of the 
                                plan year in which the benefit 
                                improvements are proposed to 
                                take effect, taking into 
                                account the relevant factors 
                                described in subparagraph 
                                (D)(vi) and the extent to which 
                                the benefits of the 
                                participants and beneficiaries 
                                were suspended.
                          (iii) Special rule for resumptions of 
                        benefits only for participants in pay 
                        status.--The plan sponsor may increase 
                        liabilities of the plan through a 
                        resumption of benefits for participants 
                        and beneficiaries in pay status only if 
                        the plan sponsor equitably distributes 
                        the value of resumed benefits to some 
                        or all of the participants and 
                        beneficiaries in pay status, taking 
                        into account the relevant factors 
                        described in subparagraph (D)(vi).
                          (iv) Special rule for certain benefit 
                        increases.--This subparagraph shall not 
                        apply to a resumption of suspended 
                        benefits or plan amendment which 
                        increases liabilities with respect to 
                        participants and beneficiaries not in 
                        pay status by the first day of the plan 
                        year in which the benefit improvements 
                        took effect which--
                                  (I) the Secretary of the 
                                Treasury, in consultation with 
                                the Pension Benefit Guaranty 
                                Corporation and the Secretary 
                                of Labor, determines to be 
                                reasonable and which provides 
                                for only de minimis increases 
                                in the liabilities of the plan, 
                                or
                                  (II) is required as a 
                                condition of qualification 
                                under part I of subchapter D of 
                                chapter 1 of subtitle A of the 
                                Internal Revenue Code of 1986 
                                or to comply with other 
                                applicable law, as determined 
                                by the Secretary of the 
                                Treasury.
                          (v) Additional limitations.--Except 
                        for resumptions of suspended benefits 
                        described in clause (iii), the 
                        limitations on benefit improvements 
                        while a suspension of benefits is in 
                        effect under this paragraph shall be in 
                        addition to any other applicable 
                        limitations on increases in benefits 
                        imposed on a plan.
                          (vi) Definition of benefit 
                        improvement.--For purposes of this 
                        subparagraph, the term ``benefit 
                        improvement'' means, with respect to a 
                        plan, a resumption of suspended 
                        benefits, an increase in benefits, an 
                        increase in the rate at which benefits 
                        accrue, or an increase in the rate at 
                        which benefits become nonforfeitable 
                        under the plan.
                  (F) Notice requirements.--
                          (i) In general.--No suspension of 
                        benefits may be made pursuant to this 
                        paragraph unless notice of such 
                        proposed suspension has been given by 
                        the plan sponsor concurrently with an 
                        application for approval of such 
                        suspension submitted under subparagraph 
                        (G) to the Secretary of the Treasury 
                        to--
                                  (I) such plan participants 
                                and beneficiaries who may be 
                                contacted by reasonable 
                                efforts,
                                  (II) each employer who has an 
                                obligation to contribute 
                                (within the meaning of section 
                                4212(a)) under the plan, and
                                  (III) each employee 
                                organization which, for 
                                purposes of collective 
                                bargaining, represents plan 
                                participants employed by such 
                                an employer.
                          (ii) Content of notice.--The notice 
                        under clause (i) shall contain--
                                  (I) sufficient information to 
                                enable participants and 
                                beneficiaries to understand the 
                                effect of any suspensions of 
                                benefits, including an 
                                individualized estimate (on an 
                                annual or monthly basis) of 
                                such effect on each participant 
                                or beneficiary,
                                  (II) a description of the 
                                factors considered by the plan 
                                sponsor in designing the 
                                benefit suspensions,
                                  (III) a statement that the 
                                application for approval of any 
                                suspension of benefits shall be 
                                available on the website of the 
                                Department of the Treasury and 
                                that comments on such 
                                application will be accepted,
                                  (IV) information as to the 
                                rights and remedies of plan 
                                participants and beneficiaries,
                                  (V) if applicable, a 
                                statement describing the 
                                appointment of a retiree 
                                representative, the date of 
                                appointment of such 
                                representative, identifying 
                                information about the retiree 
                                representative (including 
                                whether the representative is a 
                                plan trustee), and how to 
                                contact such representative, 
                                and
                                  (VI) information on how to 
                                contact the Department of the 
                                Treasury for further 
                                information and assistance 
                                where appropriate.
                          (iii) Form and manner.--Any notice 
                        under clause (i)--
                                  (I) shall be provided in a 
                                form and manner prescribed in 
                                guidance by the Secretary of 
                                the Treasury, in consultation 
                                with the Pension Benefit 
                                Guaranty Corporation and the 
                                Secretary of Labor, 
                                notwithstanding any other 
                                provision of law,
                                  (II) shall be written in a 
                                manner so as to be understood 
                                by the average plan 
                                participant, and
                                  (III) may be provided in 
                                written, electronic, or other 
                                appropriate form to the extent 
                                such form is reasonably 
                                accessible to persons to whom 
                                the notice is required to be 
                                provided.
                          (iv) Other notice requirement.--Any 
                        notice provided under clause (i) shall 
                        fulfill the requirement for notice of a 
                        significant reduction in benefits 
                        described in section 204(h).
                          (v) Model notice.--The Secretary of 
                        the Treasury, in consultation with the 
                        Pension Benefit Guaranty Corporation 
                        and the Secretary of Labor, shall in 
                        the guidance prescribed under clause 
                        (iii)(I) establish a model notice that 
                        a plan sponsor may use to meet the 
                        requirements of this subparagraph.
                  (G) Approval process by the secretary of the 
                treasury in consultation with the pension 
                benefit guaranty corporation and the secretary 
                of labor.--
                          (i) In general.--The plan sponsor of 
                        a plan in critical and declining status 
                        for a plan year that seeks to suspend 
                        benefits must submit an application to 
                        the Secretary of the Treasury for 
                        approval of the suspensions of 
                        benefits. If the plan sponsor submits 
                        an application for approval of the 
                        suspensions, the Secretary of the 
                        Treasury, in consultation with the 
                        Pension Benefit Guaranty Corporation 
                        and the Secretary of Labor, shall 
                        approve the application upon finding 
                        that the plan is eligible for the 
                        suspensions and has satisfied the 
                        criteria of subparagraphs (C), (D), 
                        (E), and (F).
                          (ii) Solicitation of comments.--Not 
                        later than 30 days after receipt of the 
                        application under clause (i), the 
                        Secretary of the Treasury, in 
                        consultation with the Pension Benefit 
                        Guaranty Corporation and the Secretary 
                        of Labor, shall publish a notice in the 
                        Federal Register soliciting comments 
                        from contributing employers, employee 
                        organizations, and participants and 
                        beneficiaries of the plan for which an 
                        application was made and other 
                        interested parties. The application for 
                        approval of the suspension of benefits 
                        shall be published on the website of 
                        the Secretary of the Treasury.
                          (iii) Required action; deemed 
                        approval.--The Secretary of the 
                        Treasury, in consultation with the 
                        Pension Benefit Guaranty Corporation 
                        and the Secretary of Labor, shall 
                        approve or deny any application for 
                        suspensions of benefits under this 
                        paragraph within 225 days after the 
                        submission of such application. An 
                        application for suspension of benefits 
                        shall be deemed approved unless, within 
                        such 225 days, the Secretary of the 
                        Treasury notifies the plan sponsor that 
                        it has failed to satisfy one or more of 
                        the criteria described in this 
                        paragraph. If the Secretary of the 
                        Treasury, in consultation with the 
                        Pension Benefit Guaranty Corporation 
                        and the Secretary of Labor, rejects a 
                        plan sponsor's application, the 
                        Secretary of the Treasury shall provide 
                        notice to the plan sponsor detailing 
                        the specific reasons for the rejection, 
                        including reference to the specific 
                        requirement not satisfied. Approval or 
                        denial by the Secretary of the Treasury 
                        of an application shall be treated as a 
                        final agency action for purposes of 
                        section 704 of title 5, United States 
                        Code.
                          (iv) Agency review.--In evaluating 
                        whether the plan sponsor has met the 
                        criteria specified in clause (ii) of 
                        subparagraph (C), the Secretary of the 
                        Treasury, in consultation with the 
                        Pension Benefit Guaranty Corporation 
                        and the Secretary of Labor, shall 
                        review the plan sponsor's consideration 
                        of factors under such clause.
                          (v) Standard for accepting plan 
                        sponsor determinations.--In evaluating 
                        the plan sponsor's application, the 
                        Secretary of the Treasury shall accept 
                        the plan sponsor's determinations 
                        unless it concludes, in consultation 
                        with the Pension Benefit Guaranty 
                        Corporation and the Secretary of Labor, 
                        that the plan sponsor's determinations 
                        were clearly erroneous.
                  (H) Participant ratification process.--
                          (i) In general.--No suspension of 
                        benefits may take effect pursuant to 
                        this paragraph prior to a vote of the 
                        participants of the plan with respect 
                        to the suspension.
                          (ii) Administration of vote.--Not 
                        later than 30 days after approval of 
                        the suspension by the Secretary of the 
                        Treasury, in consultation with the 
                        Pension Benefit Guaranty Corporation 
                        and the Secretary of Labor, under 
                        subparagraph (G), the Secretary of the 
                        Treasury, in consultation with the 
                        Pension Benefit Guaranty Corporation 
                        and the Secretary of Labor, shall 
                        administer a vote of participants and 
                        beneficiaries of the plan. Except as 
                        provided in clause (v), the suspension 
                        shall go into effect following the vote 
                        unless a majority of all participants 
                        and beneficiaries of the plan vote to 
                        reject the suspension. The plan sponsor 
                        may submit a new suspension application 
                        to the Secretary of the Treasury for 
                        approval in any case in which a 
                        suspension is prohibited from taking 
                        effect pursuant to a vote under this 
                        subparagraph.
                          (iii) Ballots.--The plan sponsor 
                        shall provide a ballot for the vote 
                        (subject to approval by the Secretary 
                        of the Treasury, in consultation with 
                        the Pension Benefit Guaranty 
                        Corporation and the Secretary of Labor) 
                        that includes the following:
                                  (I) A statement from the plan 
                                sponsor in support of the 
                                suspension.
                                  (II) A statement in 
                                opposition to the suspension 
                                compiled from comments received 
                                pursuant to subparagraph 
                                (G)(ii).
                                  (III) A statement that the 
                                suspension has been approved by 
                                the Secretary of the Treasury, 
                                in consultation with the 
                                Pension Benefit Guaranty 
                                Corporation and the Secretary 
                                of Labor.
                                  (IV) A statement that the 
                                plan sponsor has determined 
                                that the plan will become 
                                insolvent unless the suspension 
                                takes effect.
                                  (V) A statement that 
                                insolvency of the plan could 
                                result in benefits lower than 
                                benefits paid under the 
                                suspension.
                                  (VI) A statement that 
                                insolvency of the Pension 
                                Benefit Guaranty Corporation 
                                would result in benefits lower 
                                than benefits paid in the case 
                                of plan insolvency.
                          (iv) Communication by plan sponsor.--
                        It is the sense of Congress that, 
                        depending on the size and resources of 
                        the plan and geographic distribution of 
                        the plan's participants, the plan 
                        sponsor should take such steps as may 
                        be necessary to inform participants 
                        about proposed benefit suspensions 
                        through in-person meetings, telephone 
                        or internet-based communications, 
                        mailed information, or by other means.
                          (v) Systemically important plans.--
                                  (I) In general.--Not later 
                                than 14 days after a vote under 
                                this subparagraph rejecting a 
                                suspension, the Secretary of 
                                the Treasury, in consultation 
                                with the Pension Benefit 
                                Guaranty Corporation and the 
                                Secretary of Labor, shall 
                                determine whether the plan is a 
                                systemically important plan. If 
                                the Secretary of the Treasury, 
                                in consultation with the 
                                Pension Benefit Guaranty 
                                Corporation and the Secretary 
                                of Labor, determines that the 
                                plan is a systemically 
                                important plan, not later than 
                                the end of the 90-day period 
                                beginning on the date the 
                                results of the vote are 
                                certified, the Secretary of the 
                                Treasury shall, notwithstanding 
                                such adverse vote--
                                          (aa) permit the 
                                        implementation of the 
                                        suspension proposed by 
                                        the plan sponsor; or
                                          (bb) permit the 
                                        implementation of a 
                                        modification by the 
                                        Secretary of the 
                                        Treasury, in 
                                        consultation with the 
                                        Pension Benefit 
                                        Guaranty Corporation 
                                        and the Secretary of 
                                        Labor, of such 
                                        suspension (so long as 
                                        the plan is projected 
                                        to avoid insolvency 
                                        within the meaning of 
                                        section 4245 under such 
                                        modification).
                                  (II) Recommendations.--Not 
                                later than 30 days after a 
                                determination by the Secretary 
                                of the Treasury, in 
                                consultation with the Pension 
                                Benefit Guaranty Corporation 
                                and the Secretary of Labor, 
                                that the plan is systemically 
                                important, the Participant and 
                                Plan Sponsor Advocate selected 
                                under section 4004 may submit 
                                recommendations to the 
                                Secretary of the Treasury with 
                                respect to the suspension or 
                                any revisions to the 
                                suspension.
                                  (III) Systemically important 
                                plan defined.--
                                          (aa) In general.--For 
                                        purposes of this 
                                        subparagraph, a 
                                        systemically important 
                                        plan is a plan with 
                                        respect to which the 
                                        Pension Benefit 
                                        Guaranty Corporation 
                                        projects the present 
                                        value of projected 
                                        financial assistance 
                                        payments exceeds 
                                        $1,000,000,000 if 
                                        suspensions are not 
                                        implemented.
                                          (bb) Indexing.--For 
                                        calendar years 
                                        beginning after 2015, 
                                        there shall be 
                                        substituted for the 
                                        dollar amount specified 
                                        in item (aa) an amount 
                                        equal to the product of 
                                        such dollar amount and 
                                        a fraction, the 
                                        numerator of which is 
                                        the contribution and 
                                        benefit base 
                                        (determined under 
                                        section 230 of the 
                                        Social Security Act) 
                                        for the preceding 
                                        calendar year and the 
                                        denominator of which is 
                                        such contribution and 
                                        benefit base for 
                                        calendar year 2014. If 
                                        the amount otherwise 
                                        determined under this 
                                        item is not a multiple 
                                        of $1,000,000, such 
                                        amount shall be rounded 
                                        to the next lowest 
                                        multiple of $1,000,000.
                          (vi) Final authorization to 
                        suspend.--In any case in which a 
                        suspension goes into effect following a 
                        vote pursuant to clause (ii) (or 
                        following a determination under clause 
                        (v) that the plan is a systemically 
                        important plan), the Secretary of the 
                        Treasury, in consultation with the 
                        Pension Benefit Guaranty Corporation 
                        and the Secretary of Labor, shall issue 
                        a final authorization to suspend with 
                        respect to the suspension not later 
                        than 7 days after such vote (or, in the 
                        case of a suspension that goes into 
                        effect under clause (v), at a time 
                        sufficient to allow the implementation 
                        of the suspension prior to the end of 
                        the 90-day period described in clause 
                        (v)(I)).
                  (I) Judicial review.--
                          (i) Denial of application.--An action 
                        by the plan sponsor challenging the 
                        denial of an application for suspension 
                        of benefits by the Secretary of the 
                        Treasury, in consultation with the 
                        Pension Benefit Guaranty Corporation 
                        and the Secretary of Labor, may only be 
                        brought following such denial.
                          (ii) Approval of suspension of 
                        benefits.--
                                  (I) Timing of action.--An 
                                action challenging a suspension 
                                of benefits under this 
                                paragraph may only be brought 
                                following a final authorization 
                                to suspend by the Secretary of 
                                the Treasury, in consultation 
                                with the Pension Benefit 
                                Guaranty Corporation and the 
                                Secretary of Labor, under 
                                subparagraph (H)(vi).
                                  (II) Standards of review.--
                                          (aa) In general.--A 
                                        court shall review an 
                                        action challenging a 
                                        suspension of benefits 
                                        under this paragraph in 
                                        accordance with section 
                                        706 of title 5, United 
                                        States Code.
                                          (bb) Temporary 
                                        injunction.--A court 
                                        reviewing an action 
                                        challenging a 
                                        suspension of benefits 
                                        under this paragraph 
                                        may not grant a 
                                        temporary injunction 
                                        with respect to such 
                                        suspension unless the 
                                        court finds a clear and 
                                        convincing likelihood 
                                        that the plaintiff will 
                                        prevail on the merits 
                                        of the case.
                          (iii) Restricted cause of action.--A 
                        participant or beneficiary affected by 
                        a benefit suspension under this 
                        paragraph shall not have a cause of 
                        action under this title.
                          (iv) Limitation on action to suspend 
                        benefits.--No action challenging a 
                        suspension of benefits following the 
                        final authorization to suspend or the 
                        denial of an application for suspension 
                        of benefits pursuant to this paragraph 
                        may be brought after one year after the 
                        earliest date on which the plaintiff 
                        acquired or should have acquired actual 
                        knowledge of the existence of such 
                        cause of action.
                  (J) Special rule for emergence from critical 
                status.--A plan certified to be in critical and 
                declining status pursuant to projections made 
                under subsection (b)(3) for which a suspension 
                of benefits has been made by the plan sponsor 
                pursuant to this paragraph shall not emerge 
                from critical status under paragraph (4)(B), 
                until such time as--
                          (i) the plan is no longer certified 
                        to be in critical or endangered status 
                        under paragraphs (1) and (2) of 
                        subsection (b), and
                          (ii) the plan is projected to avoid 
                        insolvency under section 4245.
  (f) Rules for Operation of Plan During Adoption and 
Rehabilitation Period.--
          (1) Compliance with rehabilitation plan.--
                  (A) In general.--A plan may not be amended 
                after the date of the adoption of a 
                rehabilitation plan under subsection (e) so as 
                to be inconsistent with the rehabilitation 
                plan.
                  (B) Special rules for benefit increases.--A 
                plan may not be amended after the date of the 
                adoption of a rehabilitation plan under 
                subsection (e) so as to increase benefits, 
                including future benefit accruals, unless the 
                plan actuary certifies that such increase is 
                paid for out of additional contributions not 
                contemplated by the rehabilitation plan, and, 
                after taking into account the benefit increase, 
                the multiemployer plan still is reasonably 
                expected to emerge from critical status by the 
                end of the rehabilitation period on the 
                schedule contemplated in the rehabilitation 
                plan.
          (2) Restriction on lump sums and similar benefits.--
                  (A) In general.--Effective on the date the 
                notice of certification of the plan's critical 
                status for the initial critical year under 
                subsection (b)(3)(D) is sent, and 
                notwithstanding section 204(g), 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 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, and
                          (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.
          (3) Special rules for plan adoption period.--During 
        the period beginning on the date of the certification 
        under subsection (b)(3)(A) for the initial critical 
        year and ending on the date of the adoption of a 
        rehabilitation 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, and
                  (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 of the Internal 
                Revenue Code of 1986 or to comply with other 
                applicable law.
  (g) Adjustments Disregarded in Withdrawal Liability 
Determination.--
          (1) Benefit reduction.--Any benefit reductions under 
        subsection (e)(8) or (f) or benefit reductions or 
        suspensions while in critical and declining status 
        under subsection (e)(9)), unless the withdrawal occurs 
        more than ten years after the effective date of a 
        benefit suspension by a plan in critical and declining 
        status, shall be disregarded in determining a plan's 
        unfunded vested benefits for purposes of determining an 
        employer's withdrawal liability under section 4201.
          (2) Surcharges.--Any surcharges under subsection 
        (e)(7) shall be disregarded in determining the 
        allocation of unfunded vested benefits to an employer 
        under section 4211 and in determining the highest 
        contribution rate under section 4219(c), except for 
        purposes of determining the unfunded vested benefits 
        attributable to an employer under section 4211(c)(4) or 
        a comparable method approved under section 4211(c)(5).
          (3) Contribution increases required by funding 
        improvement or rehabilitation plan.--
                  (A) In general.--Any increase in the 
                contribution rate (or other increase in 
                contribution requirements unless due to 
                increased levels of work, employment, or 
                periods for which compensation is provided) 
                that is required or made in order to enable the 
                plan to meet the requirement of the funding 
                improvement plan or rehabilitation plan shall 
                be disregarded in determining the allocation of 
                unfunded vested benefits to an employer under 
                section 4211 and in determining the highest 
                contribution rate under section 4219(c), except 
                for purposes of determining the unfunded vested 
                benefits attributable to an employer under 
                section 4211(c)(4) or a comparable method 
                approved under section 4211(c)(5).
                  (B) Special rules.--For purposes of this 
                paragraph, any increase in the contribution 
                rate (or other increase in contribution 
                requirements) shall be deemed to be required or 
                made in order to enable the plan to meet the 
                requirement of the funding improvement plan or 
                rehabilitation plan except for increases in 
                contribution requirements due to increased 
                levels of work, employment, or periods for 
                which compensation is provided or additional 
                contributions are used to provide an increase 
                in benefits, including an increase in future 
                benefit accruals, permitted by subsection 
                (d)(1)(B) or (f)(1)(B).
          (4) Emergence from endangered or critical status.--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 expiration date of the collective bargaining 
        agreement in effect when the plan emerges from 
        endangered or critical status. Notwithstanding the 
        preceding sentence, once the plan emerges from critical 
        or endangered status, 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.
          (5) Simplified calculations.--The Pension Benefit 
        Guaranty Corporation shall prescribe simplified methods 
        for the application of this subsection in determining 
        withdrawal liability and payment amounts under section 
        4219(c).
  (h) Expedited Resolution of Plan Sponsor Decisions.--If, 
within 60 days of the due date for adoption of a funding 
improvement plan under subsection (c) or a rehabilitation plan 
under subsection (e), the plan sponsor of a plan in endangered 
status or a plan in critical status has not agreed on a funding 
improvement plan or rehabilitation plan, then any member of the 
board or group that constitutes the plan sponsor may require 
that the plan sponsor enter into an expedited dispute 
resolution procedure for the development and adoption of a 
funding improvement plan or rehabilitation plan.
  (i) Nonbargained Participation.--
          (1) Both bargained and nonbargained employee-
        participants.--In the case of an employer that 
        contributes to a multiemployer plan with respect to 
        both employees who are covered by one or more 
        collective bargaining agreements and employees who are 
        not so covered, if the plan is in endangered status or 
        in critical status, benefits of and contributions for 
        the nonbargained employees, including surcharges on 
        those contributions, shall be determined as if those 
        nonbargained employees were covered under the first to 
        expire of the employer's collective bargaining 
        agreements in effect when the plan entered endangered 
        or critical status.
          (2) Nonbargained employees only.--In the case of an 
        employer that contributes to a multiemployer plan only 
        with respect to employees who are not covered by a 
        collective bargaining agreement, this section shall be 
        applied as if the employer were the bargaining party, 
        and its participation agreement with the plan were a 
        collective bargaining agreement with a term ending on 
        the first day of the plan year beginning after the 
        employer is provided the schedule or schedules 
        described in subsections (c) and (e).
  (j) Definitions; Actuarial Method.--For purposes of this 
section--
          (1) Bargaining party.--The term ``bargaining party'' 
        means--
                  (A)(i) except as provided in clause (ii), an 
                employer who has an obligation to contribute 
                under the plan; or
                  (ii) in the case of a plan described under 
                section 404(c) of the Internal Revenue Code of 
                1986, or a continuation of such a plan, the 
                association of employers that is the employer 
                settlor of the plan; and
                  (B) an employee organization which, for 
                purposes of collective bargaining, represents 
                plan participants employed by an employer who 
                has an obligation to contribute under the plan.
          (2) Funded percentage.--The term ``funded 
        percentage'' means the percentage equal to a fraction--
                  (A) the numerator of which is the value of 
                the plan's assets, as determined under section 
                304(c)(2), and
                  (B) the denominator of which is the accrued 
                liability of the plan, determined using 
                actuarial assumptions described in section 
                304(c)(3).
          (3) Accumulated funding deficiency.--The term 
        ``accumulated funding deficiency'' has the meaning 
        given such term in section 304(a).
          (4) Active participant.--The term ``active 
        participant'' means, in connection with a multiemployer 
        plan, a participant who is in covered service under the 
        plan.
          (5) Inactive participant.--The term ``inactive 
        participant'' means, in connection with a multiemployer 
        plan, a participant, or the beneficiary or alternate 
        payee of a participant, who--
                  (A) is not in covered service under the plan, 
                and
                  (B) is in pay status under the plan or has a 
                nonforfeitable right to benefits under the 
                plan.
          (6) Pay status.--A person is in pay status under a 
        multiemployer plan if--
                  (A) at any time during the current plan year, 
                such person is a participant or beneficiary 
                under the plan and is paid an early, late, 
                normal, or disability retirement benefit under 
                the plan (or a death benefit under the plan 
                related to a retirement benefit), or
                  (B) to the extent provided in regulations of 
                the Secretary of the Treasury, such person is 
                entitled to such a benefit under the plan.
          (7) Obligation to contribute.--The term ``obligation 
        to contribute'' has the meaning given such term under 
        section 4212(a).
          (8) Actuarial method.--Notwithstanding any other 
        provision of this section, the actuary's determinations 
        with respect to a plan's normal cost, actuarial accrued 
        liability, and improvements in a plan's funded 
        percentage under this section shall be based upon the 
        unit credit funding method (whether or not that method 
        is used for the plan's actuarial valuation).
          (9) Plan sponsor.--In the case of a plan described 
        under section 404(c) of the Internal Revenue Code of 
        1986, or a continuation of such a plan, the term ``plan 
        sponsor'' means the bargaining parties described under 
        paragraph (1).
          (10) Benefit commencement date.--The term ``benefit 
        commencement date'' means the annuity starting date (or 
        in the case of a retroactive annuity starting date, the 
        date on which benefit payments begin).
  (k) Special Rules for Plans Receiving Pension Rehabilitation 
Loans.--
          (1) Determination of withdrawal liability.--
                  (A) In general.--If any employer 
                participating in a plan at the time the plan 
                receives a loan under section 4(a) of the 
                Rehabilitation for Multiemployer Pensions Act 
                of 2019 withdraws from the plan before the end 
                of the 30-year period beginning on the date of 
                the loan, the withdrawal liability of such 
                employer shall be determined--
                          (i) by applying section 4219(c)(1)(D) 
                        as if the plan were terminating by the 
                        withdrawal of every employer from the 
                        plan, and
                          (ii) by determining the value of 
                        nonforfeitable benefits under the plan 
                        at the time of the deemed termination 
                        by using the interest assumptions 
                        prescribed for purposes of section 
                        4044, as prescribed in the regulations 
                        under section 4281 in the case of such 
                        a mass withdrawal.
                  (B) Annuity contracts and investment 
                portfolios purchased with loan funds.--Annuity 
                contracts purchased and portfolios implemented 
                under section 4(d)(3) of the Rehabilitation for 
                Multiemployer Pensions Act of 2019 shall not be 
                taken into account in determining the 
                withdrawal liability of any employer under 
                subparagraph (A), but the amount equal to the 
                greater of--
                          (i) the benefits provided under such 
                        contracts or portfolios to participants 
                        and beneficiaries, or
                          (ii) the remaining payments due on 
                        the loan under section 4(a) of such 
                        Act,
                shall be so taken into account.
          (2) Coordination with funding requirements.--In the 
        case of a plan which receives a loan under section 4(a) 
        of the Rehabilitation for Multiemployer Pensions Act of 
        2019--
                  (A) annuity contracts purchased and 
                portfolios implemented under section 4(d)(3) of 
                such Act, and the benefits provided to 
                participants and beneficiaries under such 
                contracts or portfolios, shall not be taken 
                into account in determining minimum required 
                contributions under section 302,
                  (B) payments on the interest and principal 
                under the loan, and any benefits owed in excess 
                of those provided under such contracts or 
                portfolios, shall be taken into account as 
                liabilities for purposes of such section, and
                  (C) if such a portfolio is projected due to 
                unfavorable investment or actuarial experience 
                to be unable to fully satisfy the liabilities 
                which it covers, the amount of the liabilities 
                projected to be unsatisfied shall be taken into 
                account as liabilities for purposes of such 
                section.

           *       *       *       *       *       *       *


TITLE IV--PLAN TERMINATION INSURANCE

           *       *       *       *       *       *       *


SUBTITLE E--SPECIAL PROVISIONS FOR MULTIEMPLOYER PLANS

           *       *       *       *       *       *       *


                      Part 4--Financial Assistance

                          FINANCIAL ASSISTANCE

  Sec. 4261. (a) If, upon receipt of an application for 
financial assistance under section 4245(f) or section 4281(d), 
the corporation verifies that the plan is or will be insolvent 
and unable to pay basic benefits when due, the corporation 
shall provide the plan financial assistance in an amount 
sufficient to enable the plan to pay basic benefits under the 
plan.
  (b)(1) Financial assistance shall be provided under such 
conditions as the corporation determines are equitable and are 
appropriate to prevent unreasonable loss to the corporation 
with respect to the plan.
  (2) A plan which has received financial assistance shall 
repay the amount of such assistance to the corporation on 
reasonable terms consistent with regulations prescribed by the 
corporation.
  (c) Pending determination of the amount described in 
subsection (a), the corporation may provide financial 
assistance in such amounts as it considers appropriate in order 
to avoid undue hardship to plan participants and beneficiaries.
  (d)(1) The plan sponsor of a multiemployer plan--
          (A) which is in critical and declining status (within 
        the meaning of section 305(b)(6)) as of the date of the 
        enactment of this subsection, or with respect to which 
        a suspension of benefits has been approved under 
        section 305(e)(9) as of such date;
          (B) which, as of such date of enactment, is in 
        critical status (within the meaning of section 
        305(b)(2)), has a funded percentage of less than 40 
        percent (as determined for purposes of section 305), 
        and has a ratio of active to inactive participants 
        which is less than 2 to 3; or
          (C) which is insolvent for purposes of section 418E 
        of the Internal Revenue Code of 1986 as of such date of 
        enactment, if the plan became insolvent after December 
        16, 2014, and has not been terminated;
and which is applying for a loan under section 4(a) of the 
Rehabilitation for Multiemployer Pensions Act of 2019 may also 
apply to the corporation for financial assistance under this 
subsection, by jointly submitting such applications in 
accordance with section 4(d)(2) of such Act. The application 
for financial assistance under this subsection shall 
demonstrate, based on projections by the plan actuary, that 
after the receipt of the anticipated loan amount under section 
4(a) of such Act, the plan will still become (or remain) 
insolvent within the 30-year period beginning on the date of 
the loan.
  (2) In reviewing an application under paragraph (1), the 
corporation shall review the demonstrations and assumptions 
submitted with the loan application under section 4(c) of the 
Rehabilitation for Multiemployer Pensions Act of 2019 and 
provide guidance regarding such assumptions prior to approving 
any application for financial assistance under this subsection. 
The corporation may deny any application if the assumptions and 
determinations are unreasonable, or inconsistent with rules 
issued by the corporation, and the plan and the corporation are 
unable to reach agreement on such assumptions and 
determinations.
  (3) In the case of a plan described in paragraph (1)(A) or 
(1)(B), the financial assistance provided pursuant to such 
application under this subsection shall be the amount 
(determined by the plan actuary and submitted on the 
application) equal to the sum of--
          (A) the percentage of benefits of participants and 
        beneficiaries of the plan in pay status at the time of 
        the application, and
          (B) the percentage of future benefits to which 
        participants who have separated from service but are 
        not yet in pay status are entitled,
which, if such percentage were paid by the corporation in 
combination with the loan, would allow the plan to avoid 
projected insolvency. Such amount shall not exceed the maximum 
guaranteed benefit with respect to all participants and 
beneficiaries of the plan under sections 4022A and 4022B. For 
this purpose, the maximum guaranteed benefit amount shall be 
determined by disregarding any loan available from the Pension 
Rehabilitation Administration and shall be determined as if the 
plan were insolvent on the date of the application. Further, 
the present value of the maximum guaranteed benefit amount with 
respect to such participants and beneficiaries may be 
calculated in the aggregate, rather than by reference to the 
benefit of each such participant or beneficiary.
  (4) In the case of a plan described in paragraph (1)(C), the 
financial assistance provided pursuant to such application 
under this subsection shall be the amount (determined by the 
plan actuary and submitted on the application) which, if such 
amount were paid by the corporation in combination with the 
loan and any other assistance being provided to the plan by the 
corporation at the time of the application, would enable the 
plan to emerge from the projected insolvency.
  (5)(A) Except as provided in subparagraph (B), the 
corporation shall provide the financial assistance under this 
subsection only in such amounts as the corporation determines, 
at the time of approval and at the beginning of each plan year 
beginning thereafter during the period of assistance, are 
necessary for the plan to avoid insolvency during the 5 plan 
year period beginning with the current plan year.
  (B) In the case of a plan described in paragraph (1)(C), the 
financial assistance under this subsection shall be provided in 
a lump sum if deemed necessary by the corporation, and in no 
case later than December 31, 2020.
  (6) Subsections (b) and (c) shall apply to financial 
assistance under this subsection as if it were provided under 
subsection (a), except that the terms for repayment under 
subsection (b)(2) shall not require the financial assistance to 
be repaid before the date on which the loan under section 4(a) 
of the Rehabilitation for Multiemployer Pensions Act of 2019 is 
repaid in full.
  (7) The corporation may forgo repayment of the financial 
assistance provided under this subsection if necessary to avoid 
any suspension of the accrued benefits of participants.

           *       *       *       *       *       *       *


                             MINORITY VIEWS

                              Introduction

    American workers and retirees who participate in 
multiemployer defined benefit pension plans have good reason to 
be deeply concerned about the current state of the 
multiemployer pension plan system. Seventy-five percent of 
multiemployer pension plan participants are in plans that are 
less than 50 percent funded.\1\ Ninety-five percent of 
multiemployer pension plan participants are in plans that are 
less than 60 percent funded.\2\ Approximately 130 multiemployer 
plans that have promised benefits to over 1 million workers and 
retirees are projected to fail in the next 10 years, but the 
vast majority of plans are already insolvent by general 
business standards.
---------------------------------------------------------------------------
    \1\2016 PBGC Data Tables, Table M-13, https://www.pbgc.gov/sites/
default/files/2016_pension_data_tables.pdf.
    \2\Id.
---------------------------------------------------------------------------
    The Pension Benefit Guaranty Corporation's (PBGC) 
multiemployer insurance program is currently facing a $54 
billion deficit.\3\ In six years, the program will be 
completely out of money.\4\ The Committee on Education and 
Labor (the Committee) has a long history of bipartisan, 
solution-oriented work on multiemployer pension oversight and 
reform. Historically, the Committee has led Congress toward 
fiscally responsible solutions that give certainty and peace of 
mind to workers, retirees, and taxpayers alike. Therefore, it 
is extremely unfortunate and highly unusual that Committee 
Democrats unilaterally drafted and approved a sweeping, 
expensive, and deeply flawed bill that purports to address the 
underfunding crisis in multiemployer plans by creating perverse 
incentives to underfund these plans further.
---------------------------------------------------------------------------
    \3\PBGC, 2018 Annual Report, https://www.pbgc.gov/sites/default/
files/pbgc-annual-report-2018.pdf.
    \4\CBO, Options to Improve the Financial Condition of the Pension 
Benefit Guaranty Corporation's Multiemployer Program (Aug. 2, 2016).
---------------------------------------------------------------------------
    The partisan approach taken by the Committee majority 
started with the lack of a legislative hearing to examine the 
bill. The approach ended with a Committee markup in which 
Democrats amended the bill while Republicans were prevented 
from doing so. As such, Committee Republicans were denied any 
opportunity for meaningful input in the legislative process, an 
affront that runs counter to the norms of Congressional and 
Committee procedure and has resulted in an exceptionally flawed 
and extremely partisan bill.
    H.R. 397, the Rehabilitation for Multiemployer Pensions 
Act, establishes a new government agency within the Department 
of the Treasury (Treasury) to issue long-term low-interest 
loans directly to failing multiemployer defined benefit pension 
plans that may be forgiven if they are unable to be repaid. At 
markup, the Committee majority passed this bill without the 
benefit of a score from the nonpartisan Congressional Budget 
Office (CBO). A 2018 CBO estimate projected that similar 
legislation to bail out multiemployer pension plans could cost 
American taxpayers more than $100 billion.\5\ The Committee's 
failure to analyze the reported legislation thoroughly has 
denied Members of the Committee and the public a proper 
understanding of the implications of putting American taxpayers 
on the hook for failed promises in private multiemployer 
defined benefit pension plans. Furthermore, it is 
unconscionable that the reported bill walks back bipartisan 
reforms to the multiemployer pension plan system led by a 
previous Republican Chairman and Democrat Ranking Member of 
this Committee.
---------------------------------------------------------------------------
    \5\CBO, Preliminary Analysis of S. 2147, The Butch-Lewis Act of 
2017, as Introduced (July 16, 2018).
---------------------------------------------------------------------------
    Finally, H.R. 397 fails to address the very heart of the 
problem--the structural flaws in multiemployer defined benefit 
pension plans that have put American workers and retirees at 
such egregious and unsustainable risk. Unfortunately, the 
Committee's majority chose to push forward a dangerously 
irresponsible ``quick-fix'' that will do severe damage rather 
than work to achieve bipartisan, fiscally responsible, and 
forward-looking solutions to protect workers and retirees and 
to prevent mass plan insolvencies from ever happening again.

                         Background on H.R. 397

    The Committee does not consider H.R. 397 in a vacuum.\6\ 
This legislation must be viewed in context with the history--
both practical and legislative--of multiemployer defined 
benefit pension plans.
---------------------------------------------------------------------------
    \6\The issues facing multiemployer defined benefit pension plans 
are too vast and complex to rely on the very limited record from a 
single subcommittee hearing titled ``The Cost of Inaction: Why Congress 
Must Address the Multiemployer Pension Crisis,'' which was held on 
March 7, 2019. Because no Committee hearing was held on H.R. 397, the 
minority views rely on past Congressional testimony and Committee 
action. Due to the lack of any legislative vetting in the 116th 
Congress, the minority views also draw from testimony before the Joint 
Select Committee on the Solvency of Multiemployer Pension Plans formed 
in the 115th Congress, testimony before this Committee in years past, 
and other outside sources.
---------------------------------------------------------------------------
    Multiemployer plans were first regulated by the Labor 
Management Relations Act of 1947 (Taft-Hartley). Taft-Hartley 
requires plan assets to be placed in a trust for the ``sole and 
exclusive benefit'' of employees\7\ and requires that the joint 
board of trustees manage the plan's assets.\8\ Partly in 
response to several high-profile failures of defined benefit 
pension plans, Congress later enacted the Employee Retirement 
Income Security Act of 1974 (ERISA), which governs employee 
benefit plans, including multiemployer pension plans. ERISA 
sets minimum standards for employee pension plans by way of a 
``comprehensive and reticulated'' regulatory scheme.\9\ For 
example, ERISA regulates the way benefits are credited to 
workers and when those benefits vest, as well as standards for 
participant eligibility and plan funding requirements. ERISA 
also contains participant disclosure requirements regarding 
plan details, and it established PBGC, the federal backstop for 
defined benefit plans. At the time of PBGC's creation, 
multiemployer insurance premiums were set at a flat-rate of 
$0.50 per participant per year.
---------------------------------------------------------------------------
    \7\Taft-Hartley Sec.  302(c)(5), 29 U.S.C. Sec.  186(c)(5).
    \8\Taft-Hartley Sec.  302(c)(5)(B), 29 U.S.C. Sec.  186(c)(5)(B).
    \9\See Nachman Corp. v. Pension Benefit Guar. Corp., 446 U.S. 359, 
361 (1980).
---------------------------------------------------------------------------
    In 1980, in response to threats to the financial stability 
of PBGC's multiemployer insurance program, which at the time 
faced an $8.5 million deficit that threatened millions of 
participants with loss of their benefits,\10\ and to prevent 
plan insolvencies, Congress passed the Multiemployer Pension 
Plan Amendments Act of 1980 (MPPAA). MPPAA introduced the 
withdrawal liability requirement and the ``last-man standing'' 
rule. Withdrawal liability is assessed when a contributing 
employer exits the plan to ensure the funding of benefits for 
these workers; withdrawal liability is intended to cover the 
exiting employer's share of the plan's underfunding, if any. 
MPPAA also included modest increases to multiemployer plans' 
flat-rate PBGC premium--gradually increasing the flat rate to 
$2.60 per participant per year by 1988, to cover a maximum 
annual guarantee of $5,850 to a participant with 30 years of 
service.\11\
---------------------------------------------------------------------------
    \10\U.S. Gov't Accountability Off., HRD-86-4, 1980 Multiemployer 
Pension Amendments: Overview of Effects and Issues 3 (1986), https://
www.gao.gov/assets/150/144036.pdf.
    \11\MPPAA change to ERISA Sec.  4022A, 29 U.S.C.Sec.  1322a.
---------------------------------------------------------------------------
    Over time, weaknesses in the withdrawal liability rules as 
established under MPPAA became evident.\12\ For example, 
withdrawal liability may be insufficient to cover the 
difference between the value of the promises made by the 
employer and the contributions made by the employer or may be 
far more than that value. Withdrawal liability payments are 
made in annual contributions based on past contribution rates. 
Those annual payments end after 20 years regardless of whether 
they cover the employer's proportional share of the 
underfunding, except in cases of mass withdrawal. When an 
employer leaves a plan without paying its full share of 
withdrawal liability, it leaves behind ``orphan'' liabilities 
for which remaining employers must take responsibility. These 
weaknesses can negatively impact plans' funding levels or lead 
to the exit of more employers seeking to avoid the resulting 
increase in required plan contributions.\13\ In turn, 
deterioration in plan funding levels have severe negative 
impacts on PBGC.
---------------------------------------------------------------------------
    \12\U.S. Gov't Accountability Off., HRD-85-16, Effects of 
Liabilities Assessed Employers Withdrawing From Multiemployer Pension 
Plans (1985); U.S. Gov't Accountability Off., HRD-86-4, 1980 
Multiemployer Pension Amendments: Overview of Effects and Issues 10-15 
(1986).
    \13\PBGC, Multiemployer Pension Plans: Report to Congress Required 
by the Pension Protection Act of 2006 15-23 (Jan. 23, 2013).
---------------------------------------------------------------------------
    In 2000, PBGC's multiemployer insurance program had a net 
positive position of $267 million. That year, the flat-rate 
insurance premiums multiemployer plans owed to PBGC remained at 
only $2.60 per participant per year, to cover a maximum annual 
guarantee that was increased from $5,850 to $12,870 for a 
participant with 30 years of service. By 2003, PBGC's 
multiemployer insurance program had a net deficit--from which 
it has yet to emerge--of $261 million.\14\ By 2006, this 
deficit had almost tripled to $739 million.\15\
---------------------------------------------------------------------------
    \14\2016 PBGC Data Tables, Tables M-1, M-15, and M-16, https://
www.pbgc.gov/sites/default/files/2016_pension_data_tables.pdf.
    \15\Id.
---------------------------------------------------------------------------
    In 2006, Congress adopted the Pension Protection Act of 
2006 (PPA) on a bipartisan basis. The legislation passed the 
House by a vote of 279-131 and the Senate by a vote of 93-
5.\16\ PPA made significant changes to multiemployer plan 
funding rules, including ``zone rules'' designed to address 
plan underfunding.\17\ A plan's zone status is based on its 
funded ratio at the beginning of the plan year and the plan's 
projections of its ability to meet minimum funding requirements 
and to remain solvent in the future. Generally, trustees of an 
``endangered status'' or ``critical status'' plan must adopt a 
``funding improvement plan'' or ``rehabilitation plan,'' 
respectively, to improve the plan's financial health. If the 
bargaining parties agree, a critical-status underfunded plan 
could reduce or eliminate early retirement subsidies and other 
``adjustable'' benefits (e.g., disability payments or early 
retirement subsidies) for those not yet retired. But perhaps 
most importantly, PPA waived required contributions for plans 
claiming they could not afford such contributions.
---------------------------------------------------------------------------
    \16\Pension Protection Act of 2006, Pub. L. No. 109-280.
    \17\These rules are found in PPA Sec.  202 and ERISA Sec.  305. For 
purposes of these rules, plans are categorized based on the plan's 
funded status (known as ``zone'' status) and required to meet certain 
benchmarks to address underfunding.
---------------------------------------------------------------------------
    By 2014, PBGC's net deficit had more than quintupled from 
the previous year's $8.3 billion--to $42.4 billion.\18\ That 
year, the Committee led Congress in developing and passing the 
bipartisan Multiemployer Pension Reform Act (MPRA), which made 
several important changes to the rules governing multiemployer 
plans. MPRA eliminated the increased withdrawal liability that 
employers face as a result of increased contributions required 
by PPA,\19\ increased flat rate per capita PBGC premiums from 
$12 per participant per year in 2014 to $26 in 2015 (and 
indexed for inflation thereafter), and added a new ``critical 
and declining'' zone status for plans that meet the 
requirements for critical status and, in addition, are 
projected to become insolvent within the next 20 years.
---------------------------------------------------------------------------
    \18\2016 PBGC Data Tables, Table M-1 https://www.pbgc.gov/sites/
default/files/2016_pension_data_tables.pdf.
    \19\To help underfunded plans improve, employers often are required 
to pay increased contributions as a result of the plan's red-zone 
``rehabilitation plan.'' In turn, this increases the employer's 
withdrawal liability. MPRA changed the way that withdrawal liability is 
calculated to eliminate this penalty on a prospective basis on 
increased contributions that result from a rehabilitation plan.
---------------------------------------------------------------------------
    Under MPRA, plans in critical and declining status, subject 
to certain constraints, may apply to Treasury to suspend the 
benefit promises they have made down to the level that is 
expected to be payable from the plan's current and future 
resources. A benefit suspension may temporarily or permanently 
reduce current or future payment obligations of the plan to a 
participant or beneficiary under the plan, regardless of 
whether the benefits are in pay status. Plans with more than 
10,000 participants that intend to cut vested benefits are 
required to appoint a ``retiree representative'' to advocate on 
behalf of retirees. Trustees also are required to abide by 
certain participant protections. For example, benefits cannot 
be reduced below 110 percent of the PBGC guarantee; 
participants who are 80 or older at the time of the suspension 
will see no cut; participants between 75 and 80 see a 
relatively smaller cut; disability pensions are exempt; and 
plans must only cut to the extent necessary to avoid 
insolvency.
    In general, plans may only suspend benefits to the MPRA-
protected benefit level if such action is sufficient to enable 
the plan to remain solvent. Once the trustees agree to a plan 
for suspensions, they are required to submit an application to 
the Treasury. If Treasury approves the trustees' proposal, the 
participants are given the ability to veto the plan. Fifty 
percent of all the plan's participants must vote to reject the 
judgment of the trustees and Treasury. Notwithstanding the 
vote, if PBGC's expected loss with respect to the plan exceeds 
$1 billion or more in benefit payments, the suspensions will go 
into effect, subject to Treasury's modification. However, in 
large part due to a determination by the Obama administration, 
these tools cannot prevent insolvency for two of the largest 
plans expected to fail: the United Mine Workers of America 1974 
Pension Plan and the Central States' Teamsters Plan.\20\
---------------------------------------------------------------------------
    \20\Editorial, Treasury's Teamsters Bailout Ploy, Wall St. J. (May 
15, 2016). Because the United Mine Workers' plan already features more 
modest benefits (in many cases already below the PBGC guarantee level), 
without better PBGC funding, MPRA by itself will likely not provide the 
tools necessary to save the plan. The Senate Finance Committee reported 
legislation in 2016 to shore up the plan using funds from the Abandoned 
Mine Reclamation Fund and taxpayers, but it did not pass the Senate. In 
May 2016, Treasury rejected the first application under MPRA by Central 
States for benefits suspension, and the plan subsequently decided not 
to refile.
---------------------------------------------------------------------------
    As this political failure left plans without recourse and 
as the multiemployer system showed its most staggering numbers 
to date--$638 billion system-wide underfunding and a $65 
billion net deficit in PBGC's multiemployer program--in 
February 2018, the Bipartisan Budget Act of 2018 established a 
Joint Select Committee on Solvency of Multiemployer Pension 
Plans (Joint Select Committee) which was tasked with providing 
recommendations and legislative language to improve the 
solvency of multiemployer pension plans and the PBGC by a 
statutory deadline. The Joint Select Committee, made up of four 
Republican and four Democrat House Members and four Republican 
and four Democrat Senators, held public hearings and private 
briefings to examine the issue closely. The Joint Select 
Committee provided an important forum to highlight the myriad 
reasons why multiemployer pensions are in such dire straits and 
reviewed substantive proposals to address and ameliorate the 
pending insolvency of the PBGC and the multiemployer pension 
plan system. However, the Joint Select Committee was not able 
to agree on a legislative solution to address the vast 
underfunding and looming insolvency of many multiemployer plans 
and the PBGC's multiemployer insurance program by the December 
2018 statutory deadline.
    Today, multiemployer plans pay a flat-rate PBGC insurance 
premium of $29 per participant per year to cover a maximum 
annual guarantee of $12,870 for a participant with 30 years of 
service. Unfortunately, PBGC's deficit continues to grow due to 
the continued decay of funding levels in the plans it insures. 
Although the plans have attributed the funding decline in large 
part to investment losses, declining industry, and demographic 
shifts in these plans, the dire financial position of the plans 
must also include a recognition of mismanagement by the 
trustees, who could have, and were required by the law to, 
avoided subjecting the plan to the risk of such 
occurrences.\21\ Study of the continued deterioration of 
multiemployer defined benefit plans has revealed several key 
areas of plan weaknesses and a need for significant structural 
and operational changes to these plans.
---------------------------------------------------------------------------
    \21\Alicia H. Munnell et al., Ctr. For Retirement Res. at Boston 
C., Multiemployer Pension Plans: Current Status and Future Trends 
(2017), https://crr.bc.edu/wpcontent/uploads/2017/12/
multiemployer_specialreport_1_4_2018.pdf.
---------------------------------------------------------------------------
    As noted by a witness before the Joint Select Committee, 
``the inevitable consequence of inadequate contributions, risky 
investment choices, and the withdrawal liability provisions is 
a funding crisis.''\22\ Time has shown that without appropriate 
intervention the problem will worsen, leaving the workers and 
retirees that participate in multiemployer defined benefit 
plans with even fewer benefits fully funded by those who 
promised them. It is against this backdrop that the Committee 
considered H.R. 397.
---------------------------------------------------------------------------
    \22\How the Multiemployer Pension System Affects Stakeholders: 
Hearing Before the J. Select Comm. on Solvency of Multiemployer Pension 
Plans., 115th Cong. (July 25, 2018) (written statement of James P. 
Naughton, Assistant Professor, Kellogg Sch. of Mgmt., Nw. Univ., at 5) 
[hereinafter Naughton JSC Statement].
---------------------------------------------------------------------------

                   Negative Consequences of H.R. 397

    H.R. 397 is an appalling departure from the bipartisan 
reforms to the multiemployer defined benefit plan system which 
in the past have been enacted with protections for plan 
participants and beneficiaries. In stark contrast, this 
sweeping legislation is drafted to avoid any necessary and 
responsible changes on the part of plan trustees and their 
approach to managing these vast pension funds. Committee 
Democrats confirmed this notion by refusing to consider any 
Republican amendments to improve safeguards for plan 
participants and beneficiaries under the legislation. Committee 
Republicans are justifiably concerned about the severely 
negative consequences of the bill for active workers, retirees, 
taxpayers, and the future of defined benefit plan management, 
including the following:

   H.R. 397 INCLUDES NO STRUCTURAL OR OPERATIONAL REFORMS TO PROTECT 
                          WORKERS AND RETIREES

    To develop solutions that appropriately protect workers and 
retirees affected by the current situation and to prevent its 
recurrence, we need to know what allowed the severe 
underfunding in multiemployer plans to accumulate. The 
underfunding crisis facing multiemployer plans is as simple as 
it is complex: the plans cannot afford to pay the benefits they 
promised because they have not collected sufficient 
contributions to fund those promises.

(1) Measuring pension liabilities

    A fundamental task of plan trustees is to collect 
sufficient contributions from participating employers. Together 
with investment earnings, these contributions must safely 
provide the benefits that trustees, employers, and unions 
promise plan participants. To accomplish this, plan trustees 
should collect contributions equal to the present value of the 
benefits they are promising, rather than counting on above-
market investment returns or contributions from future workers.
    Simply put, the minimum required contribution for 
multiemployer plans is supposed to be an amount expected to pay 
for benefits attributable to the current year's service 
(``normal cost'') and to amortize the plan's unfunded 
liability. Under ERISA and the Tax Code, multiemployer plan 
actuaries are required to set reasonable assumptions and 
funding methods\23\ to measure actuarial liabilities and to 
determine funding costs. More specifically, the actuary must 
determine that the assumptions used are ``reasonable'' and 
offer the actuary's ``best estimate of anticipated experience 
under the plan.''\24\ Historically most multiemployer actuaries 
have generally selected a funding interest rate assumption to 
discount future liabilities based on the expected investment 
rate of return on the plan's assets and the underlying asset 
allocation. Economists generally believe that the rate of 
return on assets is not connected to the measurement of 
liabilities.\25\
---------------------------------------------------------------------------
    \23\The plan's actuary may select among reasonable liability 
funding methods that assign costs among the different periods of 
service worked by the plan's participants. Once chosen, the plan must 
get approval from the IRS to change the method. The IRS periodically 
issues guidance allowing or requiring certain types of changes.
    \24\29 U.S.C. Sec. 1084(c)(3).
    \25\Financial regulators require companies to value liabilities 
based on market bond yields, not on expected rates of return. 
Economists ``almost universally'' believe that this is the appropriate 
method for valuing pension liabilities. The Multiemployer Pension Plan 
System: Recent Reforms and Current Challenges: Hearing Before the Sen. 
Comm. on Finance, 114th Cong. (Mar. 1, 2016) (written statement of 
Andrew G. Biggs, Resident Scholar, American Enterprise Institute). 
James Naughton testified to the Joint Select Committee that Statement 
of Financial Accounting Standards No. 87 (SFAS87), Employers' 
Accounting for Pensions, has required financial reporting for pension 
liabilities to be measured ``using a discount rate that reflects the 
rate at which the obligation to pay the pension benefits can be settled 
rather than the expected investment return on the pension assets.'' 
Naughton JSC Statement, supra note 22, at 2 n.3. SFAS87 requires that 
employers look to ``rates of return on high-quality fixed-income 
investments currently available and expected to be available during the 
period to maturity of the pension benefits.'' Statement of Fin. Acct. 
Standards No. 87, Fin. Acct. Standards Board 17 (Dec. 1985), https://
www.fasb.org/jsp/FASB/Document_C/
DocumentPage?cid=1218220127991&acceptedDisclaimer=true. The ``PBGC 
rate'' used by PBGC to discount its liabilities consists of the 
discount rates used by life insurance companies to measure such 
liabilities. PBGC, 2018 Annual Report, note 6, https://www.pbgc.gov/
sites/default/files/pbgc-annual-report-2018.pdf. More specifically, the 
PBGC rate reflects the weighted blend of rates that insurance companies 
would use taking into account the duration of PBGC's liabilities.
---------------------------------------------------------------------------
    Defined benefit pensions are based on the premise that 
participants should be able to rely on pension promises in 
retirement; in other words that such promises bear little, or 
no, risk to participants. To ensure these promises are secure, 
proper measurement of pension liabilities is necessary. In 
testimony before the Subcommittee on Health, Employment, Labor, 
and Pensions (HELP) on March 7, 2019, Dr. James Naughton 
explained that multiemployer plans essentially provide annuity 
promises to participants but attempt to fund those promises at 
a fraction of the market cost. Plan trustees collect ``a 
fraction of the value of [the] annuity benefit, hoping that it 
can recoup the difference from future generations of union 
members or through exemplary investment performance.''\26\ For 
example, the Joint Select Committee heard from a contributing 
employer whose plan assumes an average rate of return 1.5 
points higher than its average returns in the latest bull 
market, and additionally ignores the plan's historical trend to 
assume that hours worked by active participants will not 
decline.\27\ Joshua Rauh additionally testified before the 
Joint Select Committee that for workers to fully count on 
getting the pension promised them, the appropriate measurement 
of such a secure promise must be based on the discount rate on 
Treasury bonds matching the duration of the promise.\28\
---------------------------------------------------------------------------
    \26\The Cost of Inaction: Why Congress Must Address the 
Multiemployer Pension Crisis: Hearing Before the Subcomm. on Health, 
Emp't, Labor, & Pensions of the H. Comm. on Educ. & Labor, 116th Cong. 
(Mar. 7, 2019) (written statement of James P. Naughton, Assistant 
Professor, Kellogg Sch. of Mgmt., Nw. Univ., at 3) [hereinafter 
Naughton HELP Statement].
    \27\Employer Perspectives on Multiemployer Pension Plans: J. Select 
Comm. on Solvency of Multiemployer Pension Plans, 115th Cong. (June 13, 
2018) (written statement of Burke Blackman, President, Egger Steel Co., 
at 2).
    \28\How the Multiemployer Pension System Affects Stakeholders: 
Hearing Before the J. Select Comm. on Solvency of Multiemployer Pension 
Plans., 115th Cong. (July 25, 2018) (written statement of Joshua D. 
Rauh, Senior Fellow & Dir. of Research, Hoover Inst., Stanford Univ., 
at 6).
---------------------------------------------------------------------------
    A multiemployer plan's funding assumptions are also used to 
determine the plan's funded percentage and certify its funded 
``zone'' status (explained infra). Two plans with the same 
market value of assets and future benefit payment streams can 
have markedly different funded percentages or funded statuses, 
depending on the interest rates they use since the ability to 
adopt more risky asset allocations, along with associated 
higher expected rates of return, allows the plans to disclose 
different funded ratios. Some argue that using a more 
conservative interest rate to discount liabilities to achieve a 
more accurate measurement of those liabilities would result in 
higher required plan contributions and drive plans currently 
considered to be healthy into one of the unhealthy zone 
statuses. However, as noted by Dr. Charles Blahous in his 
testimony before the HELP Subcommittee, ``a pension plan's 
liabilities are what they are; this reality is not changed by a 
policy desire to have a less onerous funding requirement.''\29\ 
Dr. Naughton agreed, stating that ``the costs will be higher 
because the reported costs in the past were far lower than the 
economic value of the promised pension benefits.''\30\ An 
inaccurate measurement of plan liabilities additionally does 
not facilitate an accurate comparison of the funded statuses of 
plans for government and other interested parties that monitor 
the condition of multiemployer plans.
---------------------------------------------------------------------------
    \29\The Cost of Inaction: Why Congress Must Address the 
Multiemployer Pension Crisis: Hearing Before the Subcomm. on Health, 
Emp't, Labor, & Pensions of the H. Comm. on Educ. & Labor, 116th Cong. 
(Mar. 7, 2019) (written statement of Charles P. Blahous, J. Fish & 
Lillian F. Smith Chair, Senior Research Strategist, Mercatus Ctr., 
George Mason Univ., at 9) [hereinafter Blahous Statement].
    \30\Naughton HELP Statement, supra note 26, at 5.
---------------------------------------------------------------------------
    Instead of using conservative estimates of the price of 
pension promises to ensure the promised benefits will be 
funded, most multiemployer plans attempt to provide these 
benefits at a much lower price by investing in assets they hope 
will provide higher returns than low-risk investments. Although 
plans may actually earn high investment returns, by taking this 
risky approach, plan trustees also expose the plan's 
participants to the downside risk that the plan's investments 
will not be sufficient to pay pensions as they come due. If 
plans are willing and able to respond to pensions becoming 
underfunded by taking whatever corrective measures are 
necessary, then plans could provide promised annuities even if 
their funding strategy does not work as intended. However, in 
practice, while many plans have attempted to address 
underfunding by requiring the bargaining parties to negotiate 
higher plan contributions and by decreasing future accruals, 
many plans have not sufficiently addressed the underfunding and 
instead have become increasingly underfunded.\31\
---------------------------------------------------------------------------
    \31\Naughton JSC Statement, supra note 22, at 2-4.
---------------------------------------------------------------------------

(2) Responsibility for plan losses

    Employers sponsoring multiemployer plans receive a 
competitive advantage over employers sponsoring single-employer 
plans in that employers in multiemployer plans make much 
smaller contributions for the same pension promise.\32\ This 
advantage is premised on testimony before Congress by the 
multiemployer plans that benefits in these plans were much 
safer than benefits in single-employer plans because in 
multiemployer plans, employers are jointly and severally liable 
for the pension promises made by other employers.\33\
---------------------------------------------------------------------------
    \32\Naughton HELP Statement, supra note 26, at 3.
    \33\James A. Wooten, The Employee Retirement Income Security Act of 
1974: A Political History 140-44.
---------------------------------------------------------------------------
    Although contributing employers to a multiemployer plan are 
at least nominally responsible for all plan liabilities, the 
withdrawal liability rules often allow employers to withdraw 
without paying their share of the plan's unfunded liabilities. 
A withdrawing employer must make annual contributions equal to 
the employer's highest contribution rate in the prior 10 years 
multiplied by the employer's average contribution base in the 
three consecutive years in the prior 10 with the highest bases. 
Those annual payments end after 20 years regardless of whether 
they cover the employer's proportional share of the 
underfunding except in cases of mass withdrawal. In mass 
withdrawal, those annual payments last indefinitely until the 
employer's proportional share of the underfunding is met, but 
they still do not cover liability in many cases because they 
are without interest. The failure of multiemployer plans to 
accurately measure liabilities or recognize and quickly pay 
down underfunding exacerbates those limitations. The withdrawal 
liability amount also bears no relationship to the difference 
between the value of the pensions promised to participants of 
the withdrawing employer and the contributions made by the 
employer. This leads to unpredictable withdrawal liability 
amounts that may be either insufficient to cover the difference 
between the value of the promises and contributions made by the 
employer or amounts that may be far greater than that. But 
because employers can withdraw from a plan without paying their 
share of the underfunding in the plan, withdrawals often lead 
to more underfunding.
    As illustrated above, the existing withdrawal liability 
rules are complex and opaque. Employers, especially small 
employers, have little if any insight into plan underfunding or 
the risks that plans will become underfunded in the future, or 
the degree to which that underfunding translates into 
withdrawal liability. Dr. Rauh explained in his testimony 
before the Joint Select Committee that ``the size of withdrawal 
liability for remaining employers is in part so large because 
of the terms under which prior employer participants were 
allowed to withdraw from the plans.''\34\
---------------------------------------------------------------------------
    \34\Rauh Statement, supra note 22, at 9.
---------------------------------------------------------------------------
    Another systemic problem for multiemployer plans is that 
withdrawal liability is linked to past contribution rates, and 
as such it is difficult for underfunded plans to address 
underfunding by raising contribution rates as employers can 
choose to leave plans and effectively lock in the lower older 
rates. Because plans face these constraints on the ability to 
recover from underfunding, it is even more vital to the 
protection of participant benefits that plan trustees manage 
the plans in a way to avoid becoming underfunded in the first 
place.

(3) Rules for severely underfunded plans

    Another significant problem with the multiemployer system 
is that when plans become underfunded, even if employers do not 
withdraw, some plan trustees effectively decide to leave 
underfunding largely unaddressed and continue to collect 
contributions that are insufficient to cover interest on the 
underfunding. As described below, plans claiming they cannot 
meet required contributions, even on the basis of undervalued 
liabilities, are exempt from collecting required contributions 
and instead merely have to take ``reasonable measures'' to 
improve a plan's financing. The premise of any set of rules 
requiring pension promises to be funded is that sufficient 
contributions must be collected, regardless of whether a 
collective bargaining agreement provides for such sufficient 
contributions.
    Under the PPA, multiemployer plans that claim they are 
unable to meet required contributions or are otherwise in 
critical status can receive a waiver from those contributions. 
There are no objective criteria used to determine whether a 
plan can afford required contributions. Such plans are under a 
requirement to take ``reasonable measures'' to improve funding 
levels, or if that is not reasonable, to delay insolvency. But 
many such plans fail to reduce, or even pay interest on, 
underfunding.
    In testimony before the Joint Select Committee, Dr. Joshua 
Rauh explained two separate standards for determining whether a 
plan is collecting sufficient contributions: he described plans 
as ``treading water'' when annual contributions at least cover 
the cost of new benefits and interest on the plan's unfunded 
liability; in contrast, a ``more stringent standard'' would 
require that contributions cover the cost of new benefits and 
some ``progress towards paying down the unfunded 
liability.''\35\ By adjusting the assumptions used to measure 
liabilities, plans that are merely ``treading water'' can seem 
like they are meeting the ``more stringent standard.''\36\
---------------------------------------------------------------------------
    \35\Id. at 1.
    \36\Dr. Rauh estimated that on a fair market value basis, only 17 
percent of plans are treading water, and less than 2 percent of plans 
are meeting the more stringent standard.
---------------------------------------------------------------------------
    In 2015, critical and declining plans had non-withdrawal 
liability contributions of only $1.286 billion, while the value 
of new promises on a Treasury yield curve basis was $1.491 
billion.\37\ If plan trustees allow the bargaining parties 
merely to make contributions sufficient to meet new costs, then 
plans are not operating in a way that requires employers, so 
long as they do not withdraw from the plan, to make good on 
plan promises. Thus, although employers are nominally jointly 
and severally liable for all plan promises, as a practical 
matter plans are not holding employers responsible for plan 
promises, including promises specifically made by that 
employer.
---------------------------------------------------------------------------
    \37\PBGC analysis of 5500 data, pursuant to a request for technical 
assistance.
---------------------------------------------------------------------------
    If multiemployer plans were subject to stricter funding 
rules from the outset, they would be much less likely to become 
so underfunded that they claim required contributions are 
unaffordable. In fact, some ``green zone'' plans\38\ collect 
contributions less than the fair market value of new promises, 
which inevitably leads to chronic underfunding over time.\39\ 
Green zone plans collected contributions $2.3 billion short of 
those required under current law in 2015.
---------------------------------------------------------------------------
    \38\Plans that do not fall into the endangered, critical, or 
critical and declining status are sometimes referred to as ``green 
zone'' plans.
    \39\In 2015, green zone plans had contributions of just $16.3 
billion to cover $17.9 billion in new promises on a Treasury yield 
curve basis.
---------------------------------------------------------------------------
    As described previously, required contributions are 
determined based on the cost of new promises made in the 
current plan year and an amortized portion of unfunded 
liabilities. Despite the ability to control the cost of 
contributions, multiemployer plans generally continue to make 
promises even when they cannot meet minimum required 
contributions--that is, promises in excess of what they can 
afford.\40\ Trustees of some plans less than 60 percent funded, 
or projected to be insolvent, allow the plan to continue 
promising benefits to active workers above the PBGC guarantee 
level. They do this even though PBGC's multiemployer program is 
also projected to become insolvent and therefore unable to meet 
its guarantee, by 2025.\41\ Under current rules, even 
multiemployer plans that have already run out of money and are 
receiving PBGC assistance to pay retirees may continue to make 
new promises that they will have no ability to pay. This 
creates false expectations for plan participants and interferes 
with workers' ability to plan for retirement accurately.
---------------------------------------------------------------------------
    \40\In contrast, single-employer plans that cannot meet required 
contributions must terminate. Such plans may not make new pension 
promises. In addition, single-employer plans less than 60% funded may 
not make new promises.
    \41\PBGC, 2018 Annual Report, https://www.pbgc.gov/sites/default/
files/pbgc-annual-report-2018.pdf.
---------------------------------------------------------------------------
    There are several fundamental flaws in the structure of 
multiemployer plans that have allowed underfunding to 
accumulate, leading to the current crisis: 1) The vast majority 
of multiemployer plans significantly underestimate the cost of 
the pension promises they are making; 2) There is a high level 
of uncertainty as to which employers, if any, are responsible 
for making good on pension promises should plans become 
underfunded which is why clear and transparent rules as to who 
bears responsibility for funding pension promises are needed to 
ensure that those promises will be appropriately funded and 
kept; and, 3) The rules applicable to severely underfunded 
plans give plan trustees greater discretion over plan funding 
instead of less and have allowed underfunding in these plans to 
continue to grow.
    H.R. 397 does nothing to reform the multiemployer pension 
plan system to stop these risky and unsustainable plan 
practices. Instead, the legislation maintains the current-law 
funding rules that have allowed these severely underfunded 
plans to continue to make pension promises in excess of what 
they can afford, even if it is extremely unlikely that the plan 
trustees can make good on promises previously made, let alone 
make good on new promises. H.R. 397 does a great disservice to 
the retirees and workers who were promised benefits as plan 
underfunding will become even more severe and widespread if 
these flaws are not corrected.

  H.R. 397 FAILS TO ENSURE THE CONTINUATION OF A SELF-SUFFICIENT PBGC 
                           INSURANCE PROGRAM

    As of September 30, 2018, PBGC's multiemployer program had 
a $53.9 billion deficit--$56.23 billion in liabilities, 
compared to $2.3 billion in assets. This only measures account 
liabilities from plans that have already run out of assets to 
pay promised benefits and plans that are likely to do so in the 
next decade. This deficit does not include liabilities from 
plans that may run out of assets to pay promised benefits after 
the next decade, no matter their level of unfunded liabilities.
    PBGC's multiemployer insurance program is funded entirely 
by annual premiums paid by each multiemployer pension plan, and 
its guarantees are not backed by taxpayer dollars. Premium 
levels are set by Congress. For 2019, the PBGC premium is a 
flat-rate $29 per participant. In 2018, PBGC received $303 
million in premium revenue and paid $153 million in financial 
assistance to 81 multiemployer plans.\42\ PBGC's annual 
financial assistance payments are projected to rise more 
rapidly than premium revenue, reaching an estimated $2.5 
billion by 2025 while premium revenue stays below $500 million. 
By 2025, however, assets in the multiemployer insurance fund 
will likely be exhausted. For several years, PBGC has reported 
that premiums are insufficient to cover the multiemployer 
program guarantees.\43\
---------------------------------------------------------------------------
    \42\PBGC, 2018 Annual Report 12, https://www.pbgc.gov/sites/
default/files/pbgc-annual-report-2018.pdf.
    \43\PBGC, FY 2015 Projections Report 8, https://www.pbgc.gov/sites/
default/files/legacy/docs/Projections-Report-2015.pdf; PBGC FY 2016 
Projections Report 11-12, https://www.pbgc.gov/sites/default/files/fy-
2016-projections-report-final-signed.pdf; PBGC, FY 2017 Projections 
Report 10-11, https://www.pbgc.gov/sites/default/files/fy-2017-
projections-report.pdf.
---------------------------------------------------------------------------
    Throughout PBGC's history, its obligations have not been 
backed by federal funding,\44\ and Congress revoked PBGC's 
limited authority to borrow from the Treasury in a 2012 bill 
signed into law by President Obama. PBGC's guarantee and 
premium levels are set by Congress rather than by the insurance 
agency itself as would be the case in the private sector. When 
multiemployer plans are insolvent and unable to pay benefits, 
the PBGC steps in to provide financial assistance in the form 
of loans that are rarely paid back.\45\
---------------------------------------------------------------------------
    \44\ERISA 4002 Sec. 1302(g)(2); 29 U.S.C. Sec. 1302(g)(2).
    \45\While PBGC guarantees single-employer benefits up to $67,295 
for a 65-year old, multiemployer benefits are only insured up to 
$12,870 annually for a retiree of normal retirement age with 30 years 
of service.
---------------------------------------------------------------------------
    Measuring PBGC's finances, even for the single-employer 
program, is very difficult. Over a dozen studies commissioned 
by Congress in the Moving Ahead for Progress in the 21st 
Century Act (MAP-21) and conducted by the Brookings Institution 
and the Pension Research Council concluded that PBGC generally 
underestimates the degree of the agency's downside risk.\46\ A 
2005 CBO study concluded that PBGC's single-employer program 
was about twice as underfunded as measured by PBGC at the 
time.\47\
---------------------------------------------------------------------------
    \46\Jeffrey R. Brown et al., Brookings Inst., A Review of the 
Pension Benefit Guaranty Corporation Pension Insurance Modeling System 
(2013), https://www.brookings.edu/wp-content/uploads/2016/06/PBGC-
Review-Brown-Elliott-Gordon-Hammond-FINAL-09112013.pdf; Olivia S. 
Mitchell, Wharton Sch., Univ. of PA., Technical Review Panel for the 
PIMS Model: Final Report (Sept. 2013), https://www.pbgc.gov/documents/
PIMS/WP2013-07-OSM.pdf.
    \47\CBO, The Risk Exposure of the Pension Benefit Guaranty 
Corporation (2005), https://www.cbo.gov/sites/default/files/cbofiles/
ftpdocs/66xx/doc6646/09-15-pbgc.pdf.
---------------------------------------------------------------------------
    But the multiemployer program is even harder to estimate 
because of the much more complex and uncertain rules regarding 
required contributions and the participation of many 
employers--and that would be the case even if plans were 
reporting required information. Current reporting by plans 
leaves out crucial information such as the identity of, and 
contributions by, each contributing employer, as well as the 
projected benefit payment schedule of the plans on a year-by-
year basis. A 2016 CBO study found that the fair value of 
PBGC's deficit was almost twice as large as reported by PBGC at 
the time. PBGC's reports have severely underestimated PBGC's 
future exposure. PBGC's 2008 annual report found PBGC's 
reasonably possible exposure to be $30 million.\48\ The 
reasonably possible exposure is PBGC's projection of its 
financial position 10 years into the future.\49\ By 2018, PBGC 
had booked about $55 billion in additional liabilities. PBGC's 
2009 annual report projected a mean multiemployer program 
deficit of $4 billion in 2019 and that in 95 percent of 
scenarios a 2019 deficit no worse than $14.5 billion.\50\ But, 
as of PBGC's 2018 annual report, the multiemployer program 
faces a $54 billion deficit.\51\
---------------------------------------------------------------------------
    \48\PBGC, 2008 Annual Report, https://www.pbgc.gov/documents/
2008_annual_report.pdf.
    \49\Id. note 9.
    \50\PBGC, 2009 Annual Report, https://www.pbgc.gov/documents/
2009_annual_report.pdf.
    \51\PBGC, 2018 Annual Report 27, https://www.pbgc.gov/sites/
default/files/pbgc-annual-report-2018.pdf.
---------------------------------------------------------------------------
    For 2018, PBGC projected there was an additional $9.4 
billion in reasonably possible exposure from plans that may 
start requiring financial assistance in the 10 years beginning 
in 2028.\52\ This estimate of PBGC's exposure does not include 
liabilities associated with plans that may start needing 
financial assistance more than 20 years from now. Thus, the 
liabilities booked by PBGC in its current financial position 
(taking into account plans already receiving financial 
assistance or expected to start receiving financial assistance 
in the next 10 years) and its projected financial position 
(taking into account plans projected to start needing financial 
assistance in the 10 years after that) only includes 60 percent 
of critical and declining plans, 6 percent of critical plans, 
1.5 percent of endangered plans, and 0.5 percent of other 
plans. These plans, most of which are severely underfunded on a 
market basis, contain the vast majority (about $538 billion) of 
multiemployer plans' unfunded liabilities of $638 billion.\53\ 
Any legislative solution considered by Congress should include 
long-term reforms that consider the risk posed by plans not 
expected to need financial assistance in the next 20 years. 
H.R. 397 fails in this regard.
---------------------------------------------------------------------------
    \52\Id. at 29.
    \53\Data from PBGC provided pursuant to a request for technical 
assistance.
---------------------------------------------------------------------------
    Bipartisan proposals to improve the PBGC multiemployer 
program's finances and to put PBGC on a self-sustainable path 
forward have been recommended by both the current and previous 
administrations. H.R. 397 abandons these recommendations and 
takes a radical and risky approach far removed from the 
responsible premium increases that have proved successful to 
stabilize PBGC's single-employer program. Instead, the bill 
inappropriately expands PBGC's role in providing financial 
assistance while for the first time requiring federal taxpayers 
to support financial assistance provided only through its 
multiemployer insurance program.

 H.R. 397 CREATES NEW INCENTIVES TO CONTINUE RISKY PLAN PRACTICES THAT 
                       ALLOW UNDERFUNDING TO GROW

    A concern for underfunded multiemployer plans is the risk 
of ``negative amortization''--that is, digging into a deeper 
financial hole. To avoid this, the plan must collect 
contributions, in addition to those needed to fund new 
benefits, equal to interest on the underfunding.\54\ 
Contributions should be made to avoid negative amortization but 
should also be sufficient to pay down the plan's underfunding 
gradually so that future benefits that the plan has promised 
are protected. Because multiemployer plan contributions are 
negotiated through collective bargaining, it is difficult for 
plans to quickly respond to such situations that may demand 
increased contributions.
---------------------------------------------------------------------------
    \54\Hearing on Private Employer Defined Benefit Pension Plans: 
Hearing Before the Subcomm. on Select Revenue Measures of the H. Comm. 
on Ways & Means, 113th Cong. (2014) (statement of Jeremy Gold, ). For 
2016, multiemployer plans had negative amortization of $14.8 billion, 
$10 billion of that in green zone plans. 5500 filings by multiemployer 
plans for 2016, as measured on a ``current liability'' basis.
---------------------------------------------------------------------------
    Since PBGC's multiemployer insurance program entered a 
deficit in 2003, that deficit has continued to grow, spurred on 
by the drastically increasing amount of underfunding in the 
multiemployer plans it insures. According to the most recent 
PBGC data, based on the 2015 plan year, system-wide 
multiemployer plans are only 43 percent funded when measured 
using the PBGC rate.\55\ H.R. 397, by propping up this clearly 
unsustainable system without enacting reforms to set plans on 
the right track going forward, encourages risky plan behaviors 
that resulted in these underfunding extremes.
---------------------------------------------------------------------------
    \55\2016 PBGC Data Tables, Table M-9, https://www.pbgc.gov/sites/
default/files/2016_pension_data_tables.pdf.
---------------------------------------------------------------------------
    By adopting H.R. 397, Committee Democrats chose a dangerous 
route that Dr. Blahous warned in his testimony would ``cause 
multiemployer pension underfunding to soar, as a clear 
incentive would have been established for plan sponsors to 
forego adequate pension funding.''\56\ This creates a perilous 
reality for participants in multiemployer plans other than the 
134 plans carved out for special assistance under H.R. 397, and 
for active workers in loan-recipient plans.
---------------------------------------------------------------------------
    \56\Blahous Statement, supra note 29, at 10.
---------------------------------------------------------------------------

       H.R. 397 WILL COST AMERICAN TAXPAYERS BILLIONS OF DOLLARS

    H.R. 397 establishes a new government agency within the 
Treasury, the Pension Rehabilitation Administration (PRA), to 
issue long-term low-interest loans to failing multiemployer 
defined benefit plans. The new loan program also establishes a 
dodgy, biased, and fiscally irresponsible loan structure and 
equally flawed payment terms for certain pension plans. Under 
the bill, unless plans elect an alternate repayment option, 
interest-only payments would be due for the first 29 years of 
the loan, with a lump-sum payment of the full principal owed in 
year 30. Remarkably, the loans would be forgiven if they are 
unable to be repaid. Over the loan period, a recipient plan may 
continue to promise new benefits, allowing its liabilities to 
grow. A loan recipient that has previously been approved for 
benefit suspensions that would put the plan on a sustainable 
track back to solvency under current law must reinstate all 
benefits to levels the plan cannot afford and submit 
retroactive payments for benefit suspensions that already went 
into effect.
    There are essentially no limits on the loan amounts 
available to plans as loans are authorized to cover all 
liabilities for participants and beneficiaries in pay status as 
well as all liabilities for terminated vested benefits at the 
time the loan is made, without regard to any benefit 
suspensions. Contrary to responsible legislating and regular 
order, CBO did not release a score of H.R. 397 before the 
Committee markup. However, CBO's preliminary analysis in July 
2018 of a nearly identical bill estimated that the legislation 
could increase the federal budget deficit by more than $100 
billion over 10 years alone. H.R. 397 provides extreme 
deference to the brand-new federal agency known as the PRA in 
setting loan terms, evaluating loan applications, and 
renegotiating loan terms upon default. It is highly 
inappropriate that Committee Democrats would advance complex 
and unreviewed legislation that will have tremendous impact on 
businesses, workers, retirees, and taxpayers, without knowing 
the cost.

                      Committee Procedural Failure

    Prior to the Committee markup of H.R. 397 the majority 
failed to examine H.R. 397 and avoided a thorough vetting of 
the myriad complex issues raised by the bill. After failing to 
hold any hearings on H.R. 397, Chairman Scott submitted his 
amended bill to the minority only 48 hours prior to the markup 
and then proceeded to block Republican Members from debating 
H.R. 397 and from offering any amendments to the bill during 
the markup.\57\ This outrageous effort to muzzle the minority 
party is particularly ironic as the only amendment allowed to 
the bill was the one offered by the Chairman himself.
---------------------------------------------------------------------------
    \57\A committee chairman can end debate on an amendment by ordering 
the previous question on the amendment, a motion decided by simple 
majority vote. By ordering the previous question on the amendment in 
the nature of the substitute, before other amendments were offered, the 
Chairman ended consideration and debate of other amendments.
---------------------------------------------------------------------------
    The majority's actions in this instance demonstrate a 
complete lack of willingness or preparedness to give serious 
consideration to this pressing issue and the underlying bill. 
The majority controls what issues are brought up and how much 
time they are granted by this Committee. The majority made a 
deliberate decision not to allow the Committee minority to 
review and comment on the bill. Instead of engaging in a 
thorough examination of H.R. 397 and allowing substantive 
debate on the merits of the legislation, Committee Democrats 
showed a lack of seriousness by deciding to block Committee 
Republicans from debate and deprive the full Committee from 
consideration of substantive improvements to the legislation in 
the form of 11 amendments which were shared by Committee 
Republicans in advance of consideration of H.R. 397.
    To report a bill out of Committee, to adopt an amendment, 
or to approve a procedural motion, all that is required is a 
simple majority vote. As such, the majority party is always in 
a position to ensure it will prevail on all matters. The 
minority party's opportunity to participate in the legislative 
process is therefore limited to its right to be heard, to raise 
important policy issues and concerns, and to offer substantive 
alternatives--all of which were stifled during consideration of 
H.R. 397 by the partisan whims of the majority. In these ways, 
the majority's approach is highly inappropriate and 
objectionable, especially considering the importance of the 
underlying issue to thousands of workers and retirees who by no 
fault of their own are suffering as a result of the current 
situation.

                         Republican Amendments

    H.R. 397 leaves a plethora of systemic issues facing 
multiemployer defined benefit pension plans unresolved--
including perennial underfunding, inflexible and unpredictable 
contributions, discrepancies in liability measurements, 
uncertainty surrounding orphan liabilities and withdrawal 
liability, outdated and inaccurate plan data, and an untenable 
multiemployer insurance program. These problems manifest 
themselves in concerns over funding of benefit promises to 
active workers, uncertainty in the amount of benefits that will 
be available to terminated vested participants and those in pay 
status, impediments to business transactions, and negative 
impacts on employers' ability to compete.
    Aside from these systemic issues that H.R. 397 fails to 
address, the bill puts taxpayers on the hook to bail out 
failing pension plans, creates significant risk of moral 
hazard, and neglects to make necessary structural changes to 
put the multiemployer pension plan system on the right track. 
Committee Republicans submitted amendments to the majority 
prior to consideration of the bill intended to protect plan 
participants, plan integrity, and the American taxpayer. During 
the Committee markup of H.R. 397, Committee Republicans were 
blocked not only from debating the bill, but also from offering 
any amendments to the legislation.

Obama-Trump Premiums

    The Committee's Republican Leader, Representative Virginia 
Foxx (R-NC), intended to offer an amendment that serves as an 
example of meaningful, bipartisan reforms starting with basic 
principles on which both sides can agree. In his Fiscal Year 
2017 Budget, President Obama offered a legislative proposal to 
shore up the PBGC that was later adopted by President Trump and 
included in his Fiscal Years 2018, 2019, and 2020 Budget 
submissions. Under the Obama-Trump proposal, additional 
premiums would be established to support PBGC's multiemployer 
insurance program, similar to those already applicable to 
PBGC's single-employer insurance program.\58\ While the 
multiemployer insurance program requires payment only of a 
modest flat-rate premium,\59\ PBGC's single-employer insurance 
program requires payment of a flat-rate premium and a variable-
rate premium (VRP), assessed on a plan's level of underfunding. 
In addition to raising additional revenue, this serves as a 
strong disincentive to maintaining significantly underfunded 
plans.
---------------------------------------------------------------------------
    \58\The Single Employer Pension Plan Amendments Act of 1986 raised 
the per-participant premium from $2.60 to $8.50. The Omnibus Budget 
Reconciliation Act of 1987 raised the basic per-participant premiums to 
$16 and added a variable-rate premium (VRP) tied to plan underfunding--
capped at $53. The Retirement Protection Act of 1994 phased out the $53 
per-participant cap on the VRP over three years. The Deficits Reduction 
Act of 2005 increased premiums to $30 and indexed them to the annual 
rate of growth in the national average wage. The Pension Protection Act 
of 2006 removed VRP exemptions and made permanent the $1,250 per-
participant surcharge premium for certain distress terminations. The 
Moving Ahead for Progress in the 21st Century Act (enacted July 6, 
2012) raised premiums to $42 in 2013 and $49 in 2014, and capped the 
VRP at $400 per participant. The Continuing Appropriations Resolution, 
2014 increased premiums to $57 and $64 in 2015 and 2016, respectively. 
The flat-rate per participant premium is $80 for the 2019 plan year.
    \59\For 2019, multiemployer plans pay only $29 per participant per 
year for a maximum guarantee to retirees of about $13,000 annually. In 
2012, plans were paying only $9 per year. In contrast, the single-
employer program in 2019 requires a plan sponsor to pay an annual flat-
rate premium of $80 per participant in addition to a VRP capped for 
2019 at $541 per participant.
---------------------------------------------------------------------------
    Multiemployer pension plans are collectively underfunded by 
$638 billion as of the 2016 plan year.\60\ Chairman Scott 
pointed out at the March 7, 2019, HELP Subcommittee hearing 
titled ``The Cost of Inaction: Why Congress Must Address the 
Multiemployer Pension Crisis,'' that premium costs pale in 
comparison to required plan contributions.\61\ In the 2016 plan 
year, the most recent for which we have complete data, employer 
contributions to multiemployer plans totaled over $18 billion, 
while plans paid only $282 million in PBGC multiemployer 
insurance premiums.\62\ This is not sustainable.
---------------------------------------------------------------------------
    \60\2016 PBGC Data Tables, Table M-13, https://www.pbgc.gov/sites/
default/files/2016_pension_data_tables.pdf.
    \61\The Cost of Inaction: Why Congress Must Address the 
Multiemployer Pension Crisis: Hearing Before the Subcomm. on Health, 
Emp't, Labor, & Pensions of the H. Comm. on Educ. & Labor, 116th Cong. 
(Mar. 7, 2019) (oral statement of Chairman Bobby Scott, starting at 
2:15:39), https://www.youtube.com/watch?v=hhokvHliafQ.
    \62\Form 5500 data, https://www.dol.gov/agencies/ebsa/about-ebsa/
our-activities/public-disclosure/foia/form-5500-datasets; 2016 PBGC 
Data Tables, Table M-2, https://www.pbgc.gov/sites/default/files/
2016_pension_data_tables.pdf.
---------------------------------------------------------------------------
    The premium increases included in the Foxx amendment are 
modest--especially when compared to the severity of the issue 
facing pensioners in these plans, and the unprecedented 
possibility that the federally-chartered insurance corporation 
set up to protect workers and retirees in these plans might 
fail. Most plans can withstand this modest premium increase--
still, the amendment anticipates the hardship that premium 
increases could impose on certain plans and allows a waiver of 
premium increases for plans in the worst conditions if payment 
would accelerate plan insolvency.
    PBGC estimates that a VRP assessed on a plan's amount of 
underfunding and an employer withdrawal premium to compensate 
PBGC for the extra risk posed when an employer exits a 
multiemployer plan, set at modest levels, could extend PBGC's 
solvency to 2033. This proposal sets aside partisan differences 
to make difficult--but necessary--decisions that are right for 
all parties involved.
    The modest changes included in the Foxx amendment do not 
offer a perfect solution, but they offer relief--by allowing 
PBGC's multiemployer insurance program to remain solvent into 
the year 2033--and time to craft responsible, bipartisan, and 
fiscally responsible solutions that do not use taxpayer dollars 
to bail out insolvent plans. These solutions involve complex 
issues that deserve serious consideration, and not the rigged 
process pursued by Committee Democrats at the markup of H.R. 
397.

Independent Trustees in Loan-Recipient Plans

    The HELP Subcommittee Republican Leader, Representative Tim 
Walberg (R-MI), would have offered an amendment to improve 
protections for active workers and ensure improved operation of 
strained plans under H.R. 397 by requiring removal of all 
current trustees before a plan receives a PRA loan and the 
appointment instead of an independent trustee to serve over the 
loan period.
    A multiemployer plan's board of trustees--made up of half 
union and half employer representatives--is entrusted with the 
solemn responsibility of safeguarding participant benefits. 
These trustees are obligated to ensure that plans are managed 
responsibly so that benefits promised to workers will be there 
when they retire. When Congress passed ERISA, it imposed upon 
plan trustees the highest duties known to law.\63\ Under ERISA, 
a fiduciary must act ``solely in the interest of the 
participants and beneficiaries'' for the ``exclusive purpose'' 
of providing benefits and defraying expenses.\64\
---------------------------------------------------------------------------
    \63\Donovan v. Bierwirth, 680 F.2d 263, 272 n. 8 (2d Cir. 1982).
    \64\ERISA Sec. 3(21)(A); 29 U.S.C. Sec. 1002(21)(A).
---------------------------------------------------------------------------
    While trustees cannot be expected to predict exactly how 
and when outside factors might affect their plan, trustees 
should be familiar with the general universe of outside factors 
that may influence a plan. It is safe to say that it is not in 
the interest of plan participants and beneficiaries to be in a 
severely underfunded plan. It is also not in the interest of 
plan participants and beneficiaries to be promised benefits in 
excess of what the plan can afford. Yet, these are exactly the 
circumstances a plan must prove to qualify to receive a 
taxpayer-subsidized loan under H.R. 397. Given the long-term 
nature of pension promises, trustees should manage a plan to 
ensure it can weather the ups and downs of the economy and 
demographic fluctuations.
    Trustees who have failed to safeguard participant benefits 
must not be entrusted with continued management of these 
workers' hard-earned pensions, and they should not continue to 
receive a paycheck subsidized by the American taxpayer. Pension 
benefits are sacred to the retirees who worked hard and long to 
earn them. By failing to allow consideration of the Walberg 
amendment, Committee Democrats stood against the principle that 
pensioners in failed plans deserve better than what they have 
received from current plan trustees. The majority's refusal to 
allow a debate and vote on this amendment sets up active 
workers to face the same concerns regarding funded benefit 
promises that plague terminated vested participants and current 
retirees.

Taxpayer Protection

    Committee Democrats marked up this legislation without 
producing an official cost estimate of the bill under 
consideration. It is outrageous that the Committee voted to 
adopt H.R. 397, a complex and technical bill which impacts 
millions of Americans as well as employers and labor unions 
without an official CBO score. In July 2018, the CBO released 
its preliminary analysis of an earlier iteration of this 
legislation.\65\ That CBO analysis predicted this bill could 
increase deficits by $100 billion or more in the first 10 years 
alone. CBO could not give a more specific answer because, in 
CBO's words, ``the bill as introduced does not resolve 
uncertainties around several key elements with large budgetary 
effects.'' One of those key elements is that upon a default, 
H.R. 397 allows the PRA to renegotiate the loan and forgive the 
loan principal, but the bill fails to specify conditions 
strictly surrounding adjusted repayment requirements.
---------------------------------------------------------------------------
    \65\CBO, Preliminary Analysis of S. 2147, the Butch-Lewis Act of 
2017, as introduced (2018).
---------------------------------------------------------------------------
    Representative Phil Roe (R-TN) would have offered an 
amendment to strike the section of the bill which authorizes 
the PRA to forgive the loan principal upon a recipient plan's 
default. If the true intent of H.R. 397 is to establish a loan 
program--a basic principal of which is that money lent out will 
be repaid--then this is a crucial improvement to the bill. 
Committee Democrats instead refused to consider this amendment 
and demonstrated that their true intent in passing H.R. 397 is 
to provide an open-ended federal taxpayer bailout of private-
sector plans.

Adjusted Guarantee to Cover Participants in the 1974 UMWA Plan

    Representative Walberg would have offered an amendment to 
modify the PBGC guarantee so that no participant in the United 
Mine Workers of America 1974 Pension Plan (UMWA 1974 Plan)--
expected to become insolvent in 2023--would see a single cent 
in benefit reductions, and to extend PBGC's solvency through 
2030.
    When the UMWA 1974 Plan becomes insolvent, 90 percent of 
the participants in this plan will see a reduction in benefits 
under the PBGC guarantee. Under the current formula, those with 
few years of service receive a relatively low PBGC maximum 
guarantee, which creates a unique problem in the UMWA 1974 
Plan. Mining is a dangerous job, and in recognition of those 
dangers, the UMWA 1974 plan offers a flat monthly benefit for 
life to workers who are unable to return to work after being 
injured on the job. Because these workers have few years of 
service under the plan, the PBGC guarantee structure exposes 
these workers to particularly steep cuts when their plan fails. 
Such cuts will pale in comparison to the benefit cuts these 
workers and retirees could face in 2025 when the PBGC's 
multiemployer insurance program becomes insolvent.
    The Walberg amendment, which combines the bipartisan Obama-
Trump premium proposal with an adjustment to the PBGC 
guarantee, allows for an expedited solution that guarantees 
full benefits for participants in that plan and allows PBGC to 
remain solvent, covering full benefits through 2030. Instead of 
considering a bipartisan solution that recognizes the urgency 
of the situation, providing important and expedited support for 
PBGC and America's miners participating in the UMWA 1974 Plan, 
Committee Democrats chose to prevent Rep. Walberg from offering 
this amendment.

Bargaining Oversight in Loan-Recipient Plans

    Rep. Roe intended to offer an amendment requiring any 
collective bargaining agreement that affects loan-recipient 
plans to receive approval from the Secretary of the Treasury 
and the Secretary of Labor before going into effect.

Responsible Promises

    Representative Glenn Grothman (R-WI) would have offered an 
amendment to ensure that severely underfunded multiemployer 
plans stop making promises they know they cannot afford to 
keep. In 1979, testimony at a Congressional hearing on 
multiemployer pension plans said that ``if judged by normal 
business concepts of insolvency, every multiemployer plan--
including the healthiest--would be considered insolvent.''\66\ 
Unfortunately, some things do not change. Under the normal 
business definition, a plan is insolvent when its liabilities 
exceed its assets. H.R. 397 requires that to qualify for a 
federal loan, a multiemployer plan must not only prove its 
insolvency, but it also must prove it will soon be unable to 
meet obligations as they become due. That is, a plan must prove 
it is running out of money to obtain approval to receive 
taxpayer-subsidized money.
---------------------------------------------------------------------------
    \66\Multiemployer Pension Plan Termination Insurance Program: 
Hearing Before the Subcomm. on Oversight of the H. Comm. on Ways & 
Means, 96th Cong. (1979) (statement of Theodore R. Groom).
---------------------------------------------------------------------------
    As a condition of the taxpayer-funded loans authorized by 
H.R. 397, a loan-recipient plan may not increase benefit 
accruals during the period of the loan. This does not require 
that they stop making promises; it only requires that new 
promises are not higher than promises made in the past. Thus, 
under the bill, a plan approved for a taxpayer loan--that is to 
say, a plan that is running out of money--is allowed to 
continue making new promises to active workers, even as it 
cannot pay for the promises it has already made to retirees.
    For everyone's benefit--but especially for the benefit of 
current workers who are being promised benefits decades into 
the future by a plan that has no money today--this cannot be 
permitted. Rep. Grothman's amendment would have required that 
any plan approved for a loan--and again, this means a plan that 
has already demonstrated it is running out of money--cannot 
make any new benefit promises until the loan has been repaid in 
full. This amendment affirms the principle that pension 
promises made need to be pension promises kept. Committee 
Democrats took a clear stand against retirement security for 
both workers and retirees by refusing consideration of this 
amendment.

Pensioners First

    H.R. 397 provides taxpayer-subsidized loans to failing 
pension funds, while allowing the same trustees who guided the 
plans to failure to maintain control. These unique 
circumstances require that extra consideration be given to the 
investment policies and actions permitted in these plans. 
Representative Francis Rooney (R-FL) would have offered an 
amendment to clarify that economically targeted investments are 
prohibited in loan-recipient plans and to ensure that all 
investment decisions in such plans be made solely for the 
economic benefit of plan participants.
    Committee Republicans believe that investment decisions in 
pension plans must be focused and made with one goal--the 
retirement security of pensioners in these plans. Plan 
participants, who rely on investment performance to ensure 
their retirement security, relinquish control over plan 
investment decisions trusting that the plans will be managed by 
experts with only the workers' retirement security in mind. As 
such, workers and retirees place their faith in plan trustees 
to manage plan assets in a way that ensures promised benefits 
will be available upon retirement.
    To allow multiemployer pension funds, and the trillions of 
dollars of assets they manage on behalf of pensioners, to be 
used to advance political agendas or to promote the social 
policy whims of plan trustees would be unconscionable. By 
passing H.R. 397, Committee Democrats are green-lighting, for 
the first time ever, a massive infusion of taxpayer dollars 
into these enormous pension funds. Notwithstanding the 
controversy surrounding this risky scheme, this makes it even 
more important that investment decisions are made based on what 
will ensure financial security for plan participants, without 
regard to collateral social policy issues--as plan trustees 
cannot purport to speak for the American taxpayer.
    Rep. Rooney's amendment would have required that plan 
trustees put pensioners first--ensuring that when investment 
decisions are made in participants' pension funds, their 
retirement security must be the only consideration. Instead, by 
denying consideration of this important amendment, Committee 
Democrats demonstrated their true priority is to guarantee 
union trustees the power to use the financial influence of 
pensioners' assets to drive a political agenda.

Union Collateral

    Multiemployer pension plans are maintained as part of a 
collective bargaining agreement between employers and labor 
unions--and these plans' boards of trustees are equally 
comprised of union and employer representatives. Rep. Roe would 
have offered an amendment to ensure that equal representation 
bears equal responsibility.
    Unions enticed employees with the promise of lifelong 
income in retirement but failed to manage or bargain for 
adequate funding to keep these promises. Under Rep. Roe's 
amendment, the PRA is authorized to place a lien on union 
assets as collateral for any PRA loan. If, along with Committee 
Democrats, multiemployer plans and their union representatives 
are confident that plan administration is not to blame for 
current underfunding, taxpayer-funded loans are the only 
solution for said underfunding, and no further additional 
reforms are needed to protect retirees and workers from future 
underfunding, then labor unions should be more than willing to 
provide union assets as collateral. By refusing to allow 
consideration of this amendment, Committee Democrats 
demonstrated that they are more interested in protecting union 
assets than providing for the retirement security of retirees 
and workers.

Single-Employer Parity

    H.R. 397 requires that a multiemployer pension plan 
receiving a PRA loan must reinstate any approved MPRA benefit 
suspensions to original benefit levels, whereas single-employer 
pensioners who have experienced benefit cuts would receive no 
such assistance. Rep. Roe would have offered an amendment to 
guarantee parity for these single-employer plan participants by 
expanding the loan program to include failed single-employer 
plans whose participants' benefits were reduced to the PBGC 
guarantee. By preventing Committee Republicans from offering 
any amendments to the bill, Committee Democrats refused to 
consider how their bill creates separate standards for 
multiemployer and single-employer plan benefits.

Actuarial Integrity

    Workers deserve certainty that their pension benefits will 
be funded, and taxpayers deserve certainty that their hard-
earned money will be used responsibly. To achieve this 
objective, Republican Leader Foxx would have offered an 
amendment to ensure that the loans issued under H.R. 397 are 
indeed repaid by requiring that a plan's actuary and each plan 
trustee serve as guarantors of the loan. In contrast, under 
H.R. 397, a plan's loan application must demonstrate that the 
plan is reasonably expected to be able to repay the loan. The 
Chairman's amendment in the nature of a substitute requires 
that assumptions and representations in a plan's loan 
application must not be unreasonable.
    This ``reasonable'' standard is not new. In fact, it is the 
standard to which current funding assumptions--those that have 
allowed 134 plans covering 1.3 million participants to reach 
the brink of insolvency--are held. Given the history of these 
plans and the importance of these projections, assumptions must 
be determined with the utmost level of care and required to 
reflect the most likely course of events. The Foxx amendment 
holds plan trustees and actuaries accountable for the decisions 
they make in these plans and for representations they make on a 
loan application.
    For workers and retirees, their retirement security is on 
the line. The Foxx amendment ensures that those with actual 
control over the plan have a stake in the outcome as well. 
Despite a risky and dangerous provision in the bill that allows 
forgiveness of loan principal, Democrats claim that loans 
issued under H.R. 397 will be fully repaid. Committee Democrats 
refused to debate this concern, and by failing to allow this 
amendment, Committee Democrats demonstrated their expectations 
that American taxpayers should take on significant risk to bail 
out troubled private pension plans without requiring that plan 
actuaries and trustees be prepared to stand behind their 
representations.

                               Conclusion

    The flawed, costly, and alarming policy contained in H.R. 
397 puts taxpayers on the hook for likely loan defaults, 
creates incentives for plans to continue to underfund and 
eventually fail, and endangers the retirement security of 
millions of pensioners. The majority's political choice to 
consider this flawed bill--which has no chance of moving 
forward in the Senate--will result in delays and not solutions 
for workers and retirees who are so rightfully concerned about 
the state of their pensions. H.R. 397 permits systemic flaws 
and encourages irresponsible plan practices to continue, to the 
detriment of active workers, retirees, and taxpayers. 
Shockingly, Republicans were blocked from offering their 
solutions to improve the bill to address these concerns. For 
these reasons, and those outlined above, Committee Republicans 
strongly oppose enactment of H.R. 397 as reported by the 
Committee on Education and Labor.
                                   Virginia Foxx,
                                           Ranking Member.
                                   Glenn Grothman.
                                   Mark Walker.
                                   Ben Cline.
                                   Van Taylor.
                                   Elise M. Stefanik.
                                   Jim Banks.
                                   James Comer.
                                   Russ Fulcher.
                                   Steve C. Watkins, Jr.
                                   Glenn ``GT'' Thompson.
                                   Brett Guthrie.
                                   Rick W. Allen.
                                   Lloyd Smucker.
                                   David P. Roe, M.D.
                                   Bradley Byrne.
                                   Ron Wright.
                                   Daniel Meuser.
                                   Dusty Johnson.
                                   Fred Keller.
                                   William R. Timmons, IV.

                                  [all]