In the nature of a substitute.

SA 2701. Mr. REID (for Mr. Harkin (for himself, Mr. Roberts, Mr.
Baucus, and Mr. Hatch)) proposed an amendment to the bill S. 1302, to
amend the Employee Retirement Income Security Act of 1974 and the
Internal Revenue Code of 1986 to provide for cooperative and small
employer charity pension plans; as follows:

       In lieu of the matter proposed to be inserted, insert the
     following:

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

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

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

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

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

         TITLE II--AMENDMENTS TO INTERNAL REVENUE CODE OF 1986

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

     SEC. 2. CONGRESSIONAL FINDINGS AND DECLARATIONS OF POLICY.

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

     SEC. 3. EFFECTIVE DATE.

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

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

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

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

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

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

     ``SEC. 306. MINIMUM FUNDING STANDARDS.

       ``(a) General Rule.--For purposes of section 302, the term
     `accumulated funding deficiency' for a CSEC plan means the
     excess of the total charges to the funding standard account
     for all plan years (beginning with the first plan year to
     which section 302 applies) over the total credits to such
     account for such years or, if less, the excess of the total
     charges to the alternative minimum funding standard account
     for such plan years over the total credits to such account
     for such years.
       ``(b) Funding Standard Account.--
       ``(1) Account required.--Each plan to which this section
     applies shall establish and maintain a funding standard
     account. Such account shall be credited and charged solely as
     provided in this section.
       ``(2) Charges to account.--For a plan year, the funding
     standard account shall be charged with the sum of--
       ``(A) the normal cost of the plan for the plan year,
       ``(B) the amounts necessary to amortize in equal annual
     installments (until fully amortized)--
       ``(i) in the case of a plan in existence on January 1,
     1974, the unfunded past service liability under the plan on
     the first day of the first plan year to which section 302
     applies, over a period of 40 plan years,
       ``(ii) in the case of a plan which comes into existence
     after January 1, 1974, but before the first day of the first
     plan year beginning after December 31, 2013, the unfunded
     past service liability under the plan on the first day of the
     first plan year to which section 302 applies, over a period
     of 30 plan years,
       ``(iii) separately, with respect to each plan year, the net
     increase (if any) in unfunded past service liability under
     the plan arising from plan amendments adopted in such year,
     over a period of 15 plan years,
       ``(iv) separately, with respect to each plan year, the net
     experience loss (if any) under the plan, over a period of 5
     plan years, and
       ``(v) separately, with respect to each plan year, the net
     loss (if any) resulting from changes in actuarial assumptions
     used under the plan, over a period of 10 plan years,
       ``(C) the amount necessary to amortize each waived funding
     deficiency (within the meaning of section 302(c)(3)) for each
     prior plan year in equal annual installments (until fully
     amortized) over a period of 5 plan years,
       ``(D) the amount necessary to amortize in equal annual
     installments (until fully amortized) over a period of 5 plan
     years any amount credited to the funding standard account
     under paragraph (3)(D), and
       ``(E) the amount necessary to amortize in equal annual
     installments (until fully amortized) over a period of 20
     years the contributions which would be required to be made
     under the plan but for the provisions of section
     302(c)(7)(A)(i)(I) (as in effect on the day before the
     enactment of the Pension Protection Act of 2006).
       ``(3) Credits to account.--For a plan year, the funding
     standard account shall be credited with the sum of--
       ``(A) the amount considered contributed by the employer to
     or under the plan for the plan year,
       ``(B) the amount necessary to amortize in equal annual
     installments (until fully amortized)--
       ``(i) separately, with respect to each plan year, the net
     decrease (if any) in unfunded past service liability under
     the plan arising from plan amendments adopted in such year,
     over a period of 15 plan years,
       ``(ii) separately, with respect to each plan year, the net
     experience gain (if any) under the plan, over a period of 5
     plan years, and

[[Page S532]]

       ``(iii) separately, with respect to each plan year, the net
     gain (if any) resulting from changes in actuarial assumptions
     used under the plan, over a period of 10 plan years,
       ``(C) the amount of the waived funding deficiency (within
     the meaning of section 302(c)(3)) for the plan year, and
       ``(D) in the case of a plan year for which the accumulated
     funding deficiency is determined under the funding standard
     account if such plan year follows a plan year for which such
     deficiency was determined under the alternative minimum
     funding standard, the excess (if any) of any debit balance in
     the funding standard account (determined without regard to
     this subparagraph) over any debit balance in the alternative
     minimum funding standard account.
       ``(4) Combining and offsetting amounts to be amortized.--
     Under regulations prescribed by the Secretary of the
     Treasury, amounts required to be amortized under paragraph
     (2) or paragraph (3), as the case may be--
       ``(A) may be combined into one amount under such paragraph
     to be amortized over a period determined on the basis of the
     remaining amortization period for all items entering into
     such combined amount, and
       ``(B) may be offset against amounts required to be
     amortized under the other such paragraph, with the resulting
     amount to be amortized over a period determined on the basis
     of the remaining amortization periods for all items entering
     into whichever of the two amounts being offset is the
     greater.
       ``(5) Interest.--
       ``(A) In general.--Except as provided in subparagraph (B),
     the funding standard account (and items therein) shall be
     charged or credited (as determined under regulations
     prescribed by the Secretary of the Treasury) with interest at
     the appropriate rate consistent with the rate or rates of
     interest used under the plan to determine costs.
       ``(B) Exception.--The interest rate used for purposes of
     computing the amortization charge described in subsection
     (b)(2)(C) or for purposes of any arrangement under subsection
     (d) for any plan year shall be the greater of--
       ``(i) 150 percent of the Federal mid-term rate (as in
     effect under section 1274 of the Internal Revenue Code of
     1986 for the 1st month of such plan year), or
       ``(ii) the rate of interest determined under subparagraph
     (A).
       ``(6) Amortization schedules in effect.--Amortization
     schedules for amounts described in paragraphs (2) and (3)
     that are in effect as of the last day of the last plan year
     beginning before January 1, 2014, by reason of section 104 of
     the Pension Protection Act of 2006 shall remain in effect
     pursuant to their terms and this section, except that such
     amounts shall not be amortized again under this section.
       ``(c) Special Rules.--
       ``(1) Determinations to be made under funding method.--For
     purposes of this section, normal costs, accrued liability,
     past service liabilities, and experience gains and losses
     shall be determined under the funding method used to
     determine costs under the plan.
       ``(2) Valuation of assets.--
       ``(A) In general.--For purposes of this section, the value
     of the plan's assets shall be determined on the basis of any
     reasonable actuarial method of valuation which takes into
     account fair market value and which is permitted under
     regulations prescribed by the Secretary of the Treasury.
       ``(B) Dedicated bond portfolio.--The Secretary of the
     Treasury may by regulations provide that the value of any
     dedicated bond portfolio of a plan shall be determined by
     using the interest rate under section 302(b)(5) (as in effect
     on the day before the enactment of the Pension Protection Act
     of 2006).
       ``(3) Actuarial assumptions must be reasonable.--For
     purposes of this section, all costs, liabilities, rates of
     interest, and other factors under the plan shall be
     determined on the basis of actuarial assumptions and
     methods--
       ``(A) each of which is reasonable (taking into account the
     experience of the plan and reasonable expectations), and
       ``(B) which, in combination, offer the actuary's best
     estimate of anticipated experience under the plan.
       ``(4) Treatment of certain changes as experience gain or
     loss.--For purposes of this section, if--
       ``(A) a change in benefits under the Social Security Act or
     in other retirement benefits created under Federal or State
     law, or
       ``(B) a change in the definition of the term `wages' under
     section 3121 of the Internal Revenue Code of 1986 or a change
     in the amount of such wages taken into account under
     regulations prescribed for purposes of section 401(a)(5) of
     such Code,
     results in an increase or decrease in accrued liability under
     a plan, such increase or decrease shall be treated as an
     experience loss or gain.
       ``(5) Funding method and plan year.--
       ``(A) Funding methods available.--All funding methods
     available to CSEC plans under section 302 (as in effect on
     the day before the enactment of the Pension Protection Act of
     2006) shall continue to be available under this section.
       ``(B) Changes.--If the funding method for a plan is
     changed, the new funding method shall become the funding
     method used to determine costs and liabilities under the plan
     only if the change is approved by the Secretary of the
     Treasury. If the plan year for a plan is changed, the new
     plan year shall become the plan year for the plan only if the
     change is approved by the Secretary of the Treasury.
       ``(C) Approval required for certain changes in assumptions
     by certain single-employer plans subject to additional
     funding requirement.--
       ``(i) In general.--No actuarial assumption (other than the
     assumptions described in subsection (h)(3)) used to determine
     the current liability for a plan to which this subparagraph
     applies may be changed without the approval of the Secretary
     of the Treasury.
       ``(ii) Plans to which subparagraph applies.--This
     subparagraph shall apply to a plan only if--

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

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

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

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

[[Page S533]]

     Code of 1986 shall anticipate benefit increases scheduled to
     take effect during the term of the collective bargaining
     agreement applicable to the plan.
       ``(d) Extension of Amortization Periods.--The period of
     years required to amortize any unfunded liability (described
     in any clause of subsection (b)(2)(B)) of any plan may be
     extended by the Secretary of the Treasury for a period of
     time (not in excess of 10 years) if such Secretary determines
     that such extension would carry out the purposes of this Act
     and provide adequate protection for participants under the
     plan and their beneficiaries, and if such Secretary
     determines that the failure to permit such extension would
     result in--
       ``(1) a substantial risk to the voluntary continuation of
     the plan, or
       ``(2) a substantial curtailment of pension benefit levels
     or employee compensation.
       ``(e) Alternative Minimum Funding Standard.--
       ``(1) In general.--A CSEC plan which uses a funding method
     that requires contributions in all years not less than those
     required under the entry age normal funding method may
     maintain an alternative minimum funding standard account for
     any plan year. Such account shall be credited and charged
     solely as provided in this subsection.
       ``(2) Charges and credits to account.--For a plan year the
     alternative minimum funding standard account shall be--
       ``(A) charged with the sum of--
       ``(i) the lesser of normal cost under the funding method
     used under the plan or normal cost determined under the unit
     credit method,
       ``(ii) the excess, if any, of the present value of accrued
     benefits under the plan over the fair market value of the
     assets, and
       ``(iii) an amount equal to the excess (if any) of credits
     to the alternative minimum standard account for all prior
     plan years over charges to such account for all such years,
     and
       ``(B) credited with the amount considered contributed by
     the employer to or under the plan for the plan year.
       ``(3) Interest.--The alternative minimum funding standard
     account (and items therein) shall be charged or credited with
     interest in the manner provided under subsection (b)(5) with
     respect to the funding standard account.
       ``(f) Quarterly Contributions Required.--
       ``(1) In general.--If a CSEC plan which has a funded
     current liability percentage for the preceding plan year of
     less than 100 percent fails to pay the full amount of a
     required installment for the plan year, then the rate of
     interest charged to the funding standard account under
     subsection (b)(5) with respect to the amount of the
     underpayment for the period of the underpayment shall be
     equal to the greater of--
       ``(A) 175 percent of the Federal mid-term rate (as in
     effect under section 1274 of the Internal Revenue Code of
     1986 for the 1st month of such plan year), or
       ``(B) the rate of interest used under the plan in
     determining costs.
       ``(2) Amount of underpayment, period of underpayment.--For
     purposes of paragraph (1)--
       ``(A) Amount.--The amount of the underpayment shall be the
     excess of--
       ``(i) the required installment, over
       ``(ii) the amount (if any) of the installment contributed
     to or under the plan on or before the due date for the
     installment.
       ``(B) Period of underpayment.--The period for which
     interest is charged under this subsection with regard to any
     portion of the underpayment shall run from the due date for
     the installment to the date on which such portion is
     contributed to or under the plan (determined without regard
     to subsection (c)(9)).
       ``(C) Order of crediting contributions.--For purposes of
     subparagraph (A)(ii), contributions shall be credited against
     unpaid required installments in the order in which such
     installments are required to be paid.
       ``(3) Number of required installments; due dates.--For
     purposes of this subsection--
       ``(A) Payable in 4 installments.--There shall be 4 required
     installments for each plan year.
       ``(B) Time for payment of installments.--



 ``In the case of the following required
              installments:                       The due date is:

1st......................................  April 15
2nd......................................  July 15
3rd......................................  October 15
4th......................................  January 15 of the following
                                            year.


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

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

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

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

       ``(v) Liquid assets.--The term `liquid assets' means cash,
     marketable securities and such other assets as specified by
     the Secretary of the Treasury in regulations.
       ``(vi) Quarter.--The term `quarter' means, with respect to
     any required installment, the 3-month period preceding the
     month in which the due date for such installment occurs.
       ``(F) Regulations.--The Secretary of the Treasury may
     prescribe such regulations as are necessary to carry out this
     paragraph.
       ``(6) Fiscal years and short years.--
       ``(A) Fiscal years.--In applying this subsection to a plan
     year beginning on any date other than January 1, there shall
     be substituted for the months specified in this subsection,
     the months which correspond thereto.
       ``(B) Short plan year.--This subsection shall be applied to
     plan years of less than 12 months in accordance with
     regulations prescribed by the Secretary of the Treasury.

[[Page S534]]

       ``(g) Imposition of Lien Where Failure To Make Required
     Contributions.--
       ``(1) In general.--In the case of a plan to which this
     section applies, if--
       ``(A) any person fails to make a required installment under
     subsection (f) or any other payment required under this
     section before the due date for such installment or other
     payment, and
       ``(B) the unpaid balance of such installment or other
     payment (including interest), when added to the aggregate
     unpaid balance of all preceding such installments or other
     payments for which payment was not made before the due date
     (including interest), exceeds $1,000,000,
     then there shall be a lien in favor of the plan in the amount
     determined under paragraph (3) upon all property and rights
     to property, whether real or personal, belonging to such
     person and any other person who is a member of the same
     controlled group of which such person is a member.
       ``(2) Plans to which subsection applies.--This subsection
     shall apply to a CSEC plan for any plan year for which the
     funded current liability percentage of such plan is less than
     100 percent. This subsection shall not apply to any plan to
     which section 4021 does not apply (as such section is in
     effect on the date of the enactment of the Retirement
     Protection Act of 1994).
       ``(3) Amount of lien.--For purposes of paragraph (1), the
     amount of the lien shall be equal to the aggregate unpaid
     balance of required installments and other payments required
     under this section (including interest)--
       ``(A) for plan years beginning after 1987, and
       ``(B) for which payment has not been made before the due
     date.
       ``(4) Notice of failure; lien.--
       ``(A) Notice of failure.--A person committing a failure
     described in paragraph (1) shall notify the Pension Benefit
     Guaranty Corporation of such failure within 10 days of the
     due date for the required installment or other payment.
       ``(B) Period of lien.--The lien imposed by paragraph (1)
     shall arise on the due date for the required installment or
     other payment and shall continue until the last day of the
     first plan year in which the plan ceases to be described in
     paragraph (1)(B). Such lien shall continue to run without
     regard to whether such plan continues to be described in
     paragraph (2) during the period referred to in the preceding
     sentence.
       ``(C) Certain rules to apply.--Any amount with respect to
     which a lien is imposed under paragraph (1) shall be treated
     as taxes due and owing the United States and rules similar to
     the rules of subsections (c), (d), and (e) of section 4068
     shall apply with respect to a lien imposed by subsection (a)
     and the amount with respect to such lien.
       ``(5) Enforcement.--Any lien created under paragraph (1)
     may be perfected and enforced only by the Pension Benefit
     Guaranty Corporation, or at the direction of the Pension
     Benefit Guaranty Corporation, by any contributing employer
     (or any member of the controlled group of the contributing
     employer).
       ``(6) Definitions.--For purposes of this subsection--
       ``(A) Due date; required installment.--The terms `due date'
     and `required installment' have the meanings given such terms
     by subsection (f), except that in the case of a payment other
     than a required installment, the due date shall be the date
     such payment is required to be made under this section.
       ``(B) Controlled group.--The term `controlled group' means
     any group treated as a single employer under subsections (b),
     (c), (m), and (o) of section 414 of the Internal Revenue Code
     of 1986.
       ``(h) Current Liability.--For purposes of this section--
       ``(1) In general.--The term `current liability' means all
     liabilities to employees and their beneficiaries under the
     plan.
       ``(2) Treatment of unpredictable contingent event
     benefits.--
       ``(A) In general.--For purposes of paragraph (1), any
     unpredictable contingent event benefit shall not be taken
     into account until the event on which the benefit is
     contingent occurs.
       ``(B) Unpredictable contingent event benefit.--The term
     `unpredictable contingent event benefit' means any benefit
     contingent on an event other than--
       ``(i) age, service, compensation, death, or disability, or
       ``(ii) an event which is reasonably and reliably
     predictable (as determined by the Secretary of the Treasury).
       ``(3) Interest rate and mortality assumptions used.--
       ``(A) Interest rate.--The rate of interest used to
     determine current liability under this section shall be the
     third segment rate determined under section 303(h)(2)(C).
       ``(B) Mortality tables.--
       ``(i) Secretarial authority.--The Secretary of the Treasury
     may by regulation prescribe mortality tables to be used in
     determining current liability under this subsection. Such
     tables shall be based upon the actual experience of pension
     plans and projected trends in such experience. In prescribing
     such tables, the Secretary of the Treasury shall take into
     account results of available independent studies of mortality
     of individuals covered by pension plans.
       ``(ii) Periodic review.--The Secretary of the Treasury
     shall periodically (at least every 5 years) review any tables
     in effect under this subsection and shall, to the extent the
     Secretary of the Treasury determines necessary, by regulation
     update the tables to reflect the actual experience of pension
     plans and projected trends in such experience.
       ``(C) Separate mortality tables for the disabled.--
     Notwithstanding subparagraph (B)--
       ``(i) In general.--In the case of plan years beginning
     after December 31, 1995, the Secretary of the Treasury shall
     establish mortality tables which may be used (in lieu of the
     tables under subparagraph (B)) to determine current liability
     under this subsection for individuals who are entitled to
     benefits under the plan on account of disability. The
     Secretary of the Treasury shall establish separate tables for
     individuals whose disabilities occur in plan years beginning
     before January 1, 1995, and for individuals whose
     disabilities occur in plan years beginning on or after such
     date.
       ``(ii) Special rule for disabilities occurring after
     1994.--In the case of disabilities occurring in plan years
     beginning after December 31, 1994, the tables under clause
     (i) shall apply only with respect to individuals described in
     such subclause who are disabled within the meaning of title
     II of the Social Security Act and the regulations thereunder.
       ``(4) Certain service disregarded.--
       ``(A) In general.--In the case of a participant to whom
     this paragraph applies, only the applicable percentage of the
     years of service before such individual became a participant
     shall be taken into account in computing the current
     liability of the plan.
       ``(B) Applicable percentage.--For purposes of this
     subparagraph, the applicable percentage shall be determined
     as follows:



                                           The applicable percentage is:
  ``If the years of participation  are:

1........................................  20
2........................................  40
3........................................  60
4........................................  80
5 or more................................  100.


       ``(C) Participants to whom paragraph applies.--This
     subparagraph shall apply to any participant who, at the time
     of becoming a participant--
       ``(i) has not accrued any other benefit under any defined
     benefit plan (whether or not terminated) maintained by the
     employer or a member of the same controlled group of which
     the employer is a member,
       ``(ii) who first becomes a participant under the plan in a
     plan year beginning after December 31, 1987, and
       ``(iii) has years of service greater than the minimum years
     of service necessary for eligibility to participate in the
     plan.
       ``(D) Election.--An employer may elect not to have this
     subparagraph apply. Such an election, once made, may be
     revoked only with the consent of the Secretary of the
     Treasury.
       ``(i) Funded Current Liability Percentage.--For purposes of
     this section, the term `funded current liability percentage'
     means, with respect to any plan year, the percentage which--
       ``(1) the value of the plan's assets determined under
     subsection (c)(2), is of
       ``(2) the current liability under the plan.
       ``(j) Funding Restoration Status.--Notwithstanding any
     other provisions of this section--
       ``(1) Normal cost payment.--
       ``(A) In general.--In the case of a CSEC plan that is in
     funding restoration status for a plan year, for purposes of
     section 302, the term `accumulated funding deficiency' means,
     for such plan year, the greater of--
       ``(i) the amount described in subsection (a), or
       ``(ii) the excess of the normal cost of the plan for the
     plan year over the amount actually contributed to or under
     the plan for the plan year.

[[Page S535]]

       ``(B) Normal cost.--In the case of a CSEC plan that uses a
     spread gain funding method, for purposes of this subsection,
     the term `normal cost' means normal cost as determined under
     the entry age normal funding method.
       ``(2) Plan amendments.--In the case of a CSEC plan that is
     in funding restoration status for a plan year, no amendment
     to such plan may take effect during such plan year if such
     amendment has the effect of increasing liabilities of the
     plan by means of increases in benefits, establishment of new
     benefits, changing the rate of benefit accrual, or changing
     the rate at which benefits become nonforfeitable. This
     paragraph shall not apply to any plan amendment that is
     required to comply with any applicable law. This paragraph
     shall cease to apply with respect to any plan year, effective
     as of the first day of the plan year (or if later, the
     effective date of the amendment) upon payment by the plan
     sponsor of a contribution to the plan (in addition to any
     contribution required under this section without regard to
     this paragraph) in an amount equal to the increase in the
     funding liability of the plan attributable to the plan
     amendment.
       ``(3) Funding restoration plan.--The sponsor of a CSEC plan
     shall establish a written funding restoration plan within 180
     days of the receipt by the plan sponsor of a certification
     from the plan actuary that the plan is in funding restoration
     status for a plan year. Such funding restoration plan shall
     consist of actions that are calculated, based on reasonably
     anticipated experience and reasonable actuarial assumptions,
     to increase the plan's funded percentage to 100 percent over
     a period that is not longer than the greater of 7 years or
     the shortest amount of time practicable. Such funding
     restoration plan shall take into account contributions
     required under this section (without regard to this
     paragraph). If a plan remains in funding restoration status
     for 2 or more years, such funding restoration plan shall be
     updated each year after the 1st such year within 180 days of
     receipt by the plan sponsor of a certification from the plan
     actuary that the plan remains in funding restoration status
     for the plan year.
       ``(4) Annual certification by plan actuary.--Not later than
     the 90th day of each plan year of a CSEC plan, the plan
     actuary shall certify to the plan sponsor whether or not the
     plan is in funding restoration status for the plan year,
     based on the plan's funded percentage as of the beginning of
     the plan year. For this purpose, the actuary may conclusively
     rely on an estimate of--
       ``(A) the plan's funding liability, based on the funding
     liability of the plan for the preceding plan year and on
     reasonable actuarial estimates, assumptions, and methods, and
       ``(B) the amount of any contributions reasonably
     anticipated to be made for the preceding plan year.
     Contributions described in subparagraph (B) shall be taken
     into account in determining the plan's funded percentage as
     of the beginning of the plan year.
       ``(5) Definitions.--For purposes of this subsection--
       ``(A) Funding restoration status.--A CSEC plan shall be
     treated as in funding restoration status for a plan year if
     the plan's funded percentage as of the beginning of such plan
     year is less than 80 percent.
       ``(B) Funded percentage.--The term `funded percentage'
     means the ratio (expressed as a percentage) which--
       ``(i) the value of plan assets (as determined under
     subsection (c)(2)), bears to
       ``(ii) the plan's funding liability.
       ``(C) Funding liability.--The term `funding liability' for
     a plan year means the present value of all benefits accrued
     or earned under the plan as of the beginning of the plan
     year, based on the assumptions used by the plan pursuant to
     this section, including the interest rate described in
     subsection (b)(5)(A) (without regard to subsection
     (b)(5)(B)).
       ``(D) Spread gain funding method.--The term `spread gain
     funding method' has the meaning given such term under rules
     and forms issued by the Secretary of the Treasury.''.
       (b) Separate Rules for Csec Plans.--
       (1) In general.--Paragraph (2) of section 302(a) of the
     Employee Retirement Income Security Act of 1974 (29 U.S.C.
     1082(a)) is amended by striking ``and'' at the end of
     subparagraph (B), by striking the period at the end of
     subparagraph (C) and inserting ``, and'', and by inserting at
     the end thereof the following new subparagraph:
       ``(D) in the case of a CSEC plan, the employers make
     contributions to or under the plan for any plan year which,
     in the aggregate, are sufficient to ensure that the plan does
     not have an accumulated funding deficiency under section 306
     as of the end of the plan year.''.
       (2) Conforming amendments.--Section 302 of the Employee
     Retirement Income Security Act of 1974 (29 U.S.C. 1082) is
     amended--
       (A) by striking ``multiemployer plan'' the first place it
     appears in clause (i) of subsection (c)(1)(A) and the last
     place it appears in paragraph (2) of subsection (d), and
     inserting ``multiemployer plan or a CSEC plan'',
       (B) by striking ``303(j)'' in paragraph (1) of subsection
     (b) and inserting ``303(j) or under section 306(f)'',
       (C)(i) by striking ``and'' at the end of clause (i) of
     subsection (c)(1)(B),
       (ii) by striking the period at the end of clause (ii) of
     subsection (c)(1)(B), and inserting ``, and'', and
       (iii) by inserting the following new clause after clause
     (ii) of subsection (c)(1)(B):
       ``(iii) in the case of a CSEC plan, the funding standard
     account shall be credited under section 306(b)(3)(C) with the
     amount of the waived funding deficiency and such amount shall
     be amortized as required under section 306(b)(2)(C).'',
       (D) by striking ``under paragraph (1)'' in clause (i) of
     subsection (c)(4)(A) and inserting ``under paragraph (1) or
     for granting an extension under section 306(d)'',
       (E) by striking ``waiver under this subsection'' in
     subparagraph (B) of subsection (c)(4) and inserting ``waiver
     under this subsection or an extension under 306(d)'',
       (F) by striking ``waiver or modification'' in subclause (I)
     of subsection (c)(4)(B)(i) and inserting ``waiver,
     modification, or extension'',
       (G) by striking ``waivers'' in the heading of subsection
     (c)(4)(C) and of clause (ii) of subsection (c)(4)(C) and
     inserting ``waivers or extensions'',
       (H) by striking ``section 304(d)'' in subparagraph (A) of
     subsection (c)(7) and in paragraph (2) of subsection (d) and
     inserting ``section 304(d) or section 306(d)'',
       (I) by striking ``and'' at the end of subclause (I) of
     subsection (c)(4)(C)(i) and adding ``or the accumulated
     funding deficiency under section 306, whichever is
     applicable,'',
       (J) by striking ``303(e)(2),'' in subclause (II) of
     subsection (c)(4)(C)(i) and inserting ``303(e)(2) or
     306(b)(2)(C), whichever is applicable, and'',
       (K) by adding immediately after subclause (II) of
     subsection (c)(4)(C)(i) the following new subclause:

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

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

     SEC. 103. ELECTIONS.

       (a) Election Not To Be Treated as a CSEC Plan.--Subsection
     (f) of section 210 of the Employee Retirement Income Security
     Act of 1974, as added by section 101, is amended by adding at
     the end the following new paragraph:
       ``(3) Election.--
       ``(A) In general.--If a plan falls within the definition of
     a CSEC plan under this subsection (without regard to this
     paragraph), such plan shall be a CSEC plan unless the plan
     sponsor elects not later than the close of the first plan
     year of the plan beginning after December 31, 2013, not to be
     treated as a CSEC plan. An election under the preceding
     sentence shall take effect for such plan year and, once made,
     may be revoked only with the consent of the Secretary of the
     Treasury.
       ``(B) Special rule.--If a plan described in subparagraph
     (A) is treated as a CSEC plan, section 104 of the Pension
     Protection Act of 2006, as amended by the Preservation of
     Access to Care for Medicare Beneficiaries and

[[Page S536]]

     Pension Relief Act of 2010, shall cease to apply to such plan
     as of the first date as of which such plan is treated as a
     CSEC plan.''.
       (b) Election To Cease To Be Treated as an Eligible Charity
     Plan.--Subsection (d) of section 104 of the Pension
     Protection Act of 2006, as added by section 202 of the
     Preservation of Access to Care for Medicare Beneficiaries and
     Pension Relief Act of 2010, is amended--
       (1) by striking ``For purposes of'' and inserting ``(1) In
     general.--For purposes of'', and
       (2) by adding at the end the following:
       ``(2) Election not to be an eligible charity plan.--A plan
     sponsor may elect for a plan to cease to be treated as an
     eligible charity plan for plan years beginning after December
     31, 2013. Such election shall be made at such time and in
     such form and manner as shall be prescribed by the Secretary
     of the Treasury. Any such election may be revoked only with
     the consent of the Secretary of the Treasury.
       ``(3) Election to use funding options available to other
     plan sponsors.--
       ``(A) A plan sponsor that makes the election described in
     paragraph (2) may elect for a plan to apply the rules
     described in subparagraphs (B), (C), and (D) for plan years
     beginning after December 31, 2013. Such election shall be
     made at such time and in such form and manner as shall be
     prescribed by the Secretary of the Treasury. Any such
     election may be revoked only with the consent of the
     Secretary of the Treasury.
       ``(B) Under the rules described in this subparagraph, for
     the first plan year beginning after December 31, 2013, a plan
     has--
       ``(i) an 11-year shortfall amortization base,
       ``(ii) a 12-year shortfall amortization base, and
       ``(iii) a 7-year shortfall amortization base.
       ``(C) Under the rules described in this subparagraph,
     section 303(c)(2)(A) and (B) of the Employee Retirement
     Income Security Act of 1974, and section 430(c)(2)(A) and (B)
     of the Internal Revenue Code of 1986 shall be applied by--
       ``(i) in the case of an 11-year shortfall amortization
     base, substituting `11-plan-year period' for `7-plan-year
     period' wherever such phrase appears, and
       ``(ii) in the case of a 12-year shortfall amortization
     base, substituting `12-plan-year period' for `7-plan-year
     period' wherever such phrase appears.
       ``(D) Under the rules described in this subparagraph,
     section 303(c)(7) of the Employee Retirement Income Security
     Act of 1974 and section 430(c)(7) of the Internal Revenue
     Code of 1986 shall apply to a plan for which an election has
     been made under subparagraph (A). Such provisions shall apply
     in the following manner:
       ``(i) The first plan year beginning after December 31,
     2013, shall be treated as an election year, and no other plan
     years shall be so treated.
       ``(ii) All references in section 303(c)(7) of such Act and
     section 430(c)(7) of such Code to `February 28, 2010' or
     `March 1, 2010' shall be treated as references to `February
     28, 2013' or `March 1, 2013', respectively.
       ``(E) For purposes of this paragraph, the 11-year
     amortization base is an amount, determined for the first plan
     year beginning after December 31, 2013, equal to the
     unamortized principal amount of the shortfall amortization
     base (as defined in section 303(c)(3) of the Employee
     Retirement Income Security Act of 1974 and section 430(c)(3)
     of the Internal Revenue Code of 1986) that would have applied
     to the plan for the first plan beginning after December 31,
     2009, if--
       ``(i) the plan had never been an eligible charity plan,
       ``(ii) the plan sponsor had made the election described in
     section 303(c)(2)(D)(i) of the Employee Retirement Income
     Security Act of 1974 and in section 430(c)(2)(D)(i) of the
     Internal Revenue Code of 1986 to have section 303(c)(2)(D)(i)
     of such Act and section 430(c)(2)(D)(iii) of such Code apply
     with respect to the shortfall amortization base for the first
     plan year beginning after December 31, 2009, and
       ``(iii) no event had occurred under paragraph (6) or (7) of
     section 303(c) of such Act or paragraph (6) or (7) of section
     430(c) of such Code that, as of the first day of the first
     plan year beginning after December 31, 2013, would have
     modified the shortfall amortization base or the shortfall
     amortization installments with respect to the first plan year
     beginning after December 31, 2009.
       ``(F) For purposes of this paragraph, the 12-year
     amortization base is an amount, determined for the first plan
     year beginning after December 31, 2013, equal to the
     unamortized principal amount of the shortfall amortization
     base (as defined in section 303(c)(3) of the Employee
     Retirement Income Security Act of 1974 and section 430(c)(3)
     of the Internal Revenue Code of 1986) that would have applied
     to the plan for the first plan beginning after December 31,
     2010, if--
       ``(i) the plan had never been an eligible charity plan,
       ``(ii) the plan sponsor had made the election described in
     section 303(c)(2)(D)(i) of the Employee Retirement Income
     Security Act of 1974 and in section 430(c)(2)(D)(i) of the
     Internal Revenue Code of 1986 to have section 303(c)(2)(D)(i)
     of such Act and section 430(c)(2)(D)(iii) of such Code apply
     with respect to the shortfall amortization base for the first
     plan year beginning after December 31, 2010, and
       ``(iii) no event had occurred under paragraph (6) or (7) of
     section 303(c) of such Act or paragraph (6) or (7) of section
     430(c) of such Code that, as of the first day of the first
     plan year beginning after December 31, 2013, would have
     modified the shortfall amortization base or the shortfall
     amortization installments with respect to the first plan year
     beginning after December 31, 2010.
       ``(G) For purposes of this paragraph, the 7-year shortfall
     amortization base is an amount, determined for the first plan
     year beginning after December 31, 2013, equal to--
       ``(i) the shortfall amortization base for the first plan
     year beginning after December 31, 2013, without regard to
     this paragraph, minus
       ``(ii) the sum of the 11-year shortfall amortization base
     and the 12-year shortfall amortization base.
       ``(4) Retroactive election.--Not later than December 31,
     2014, a plan sponsor may make a one-time, irrevocable,
     retroactive election to not be treated as an eligible charity
     plan. Such election shall be effective for plan years
     beginning after December 31, 2007, and shall be made by
     providing reasonable notice to the Secretary of the
     Treasury.''.
       (c) Deemed Election.--For purposes of the Internal Revenue
     Code of 1986, sections 4(b)(2) and 4021(b)(3) of the Employee
     Retirement Income Security Act of 1974, and all other
     purposes, a plan shall be deemed to have made an irrevocable
     election under section 410(d) of the Internal Revenue Code of
     1986 if--
       (1) the plan was established before January 1, 2014;
       (2) the plan falls within the definition of a CSEC plan;
       (3) the plan sponsor does not make an election under
     section 210(f)(3)(A) of the Employee Retirement Income
     Security Act of 1974 and section 414(y)(3)(A) of the Internal
     Revenue Code of 1986, as added by this Act; and
       (4) the plan, plan sponsor, administrator, or fiduciary
     remits one or more premium payments for the plan to the
     Pension Benefit Guaranty Corporation for a plan year
     beginning after December 31, 2013.
       (d) Effective Date.--The amendments made by this section
     shall apply as of the date of enactment of this Act.

     SEC. 104. TRANSPARENCY.

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

     SEC. 105. SPONSOR EDUCATION AND ASSISTANCE.

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

[[Page S537]]

         TITLE II--AMENDMENTS TO INTERNAL REVENUE CODE OF 1986

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

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

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

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

     ``SEC. 433. MINIMUM FUNDING STANDARDS.

       ``(a) General Rule.--For purposes of section 412, the term
     `accumulated funding deficiency' for a CSEC plan means the
     excess of the total charges to the funding standard account
     for all plan years (beginning with the first plan year to
     which section 412 applies) over the total credits to such
     account for such years or, if less, the excess of the total
     charges to the alternative minimum funding standard account
     for such plan years over the total credits to such account
     for such years.
       ``(b) Funding Standard Account.--
       ``(1) Account required.--Each plan to which this section
     applies shall establish and maintain a funding standard
     account. Such account shall be credited and charged solely as
     provided in this section.
       ``(2) Charges to account.--For a plan year, the funding
     standard account shall be charged with the sum of--
       ``(A) the normal cost of the plan for the plan year,
       ``(B) the amounts necessary to amortize in equal annual
     installments (until fully amortized)--
       ``(i) in the case of a plan in existence on January 1,
     1974, the unfunded past service liability under the plan on
     the first day of the first plan year to which section 412
     applies, over a period of 40 plan years,
       ``(ii) in the case of a plan which comes into existence
     after January 1, 1974, but before the first day of the first
     plan year beginning after December 31, 2013, the unfunded
     past service liability under the plan on the first day of the
     first plan year to which section 412 applies, over a period
     of 30 plan years,
       ``(iii) separately, with respect to each plan year, the net
     increase (if any) in unfunded past service liability under
     the plan arising from plan amendments adopted in such year,
     over a period of 15 plan years,
       ``(iv) separately, with respect to each plan year, the net
     experience loss (if any) under the plan, over a period of 5
     plan years, and
       ``(v) separately, with respect to each plan year, the net
     loss (if any) resulting from changes in actuarial assumptions
     used under the plan, over a period of 10 plan years,
       ``(C) the amount necessary to amortize each waived funding
     deficiency (within the meaning of section 412(c)(3)) for each
     prior plan year in equal annual installments (until fully
     amortized) over a period of 5 plan years,
       ``(D) the amount necessary to amortize in equal annual
     installments (until fully amortized) over a period of 5 plan
     years any amount credited to the funding standard account
     under paragraph (3)(D), and
       ``(E) the amount necessary to amortize in equal annual
     installments (until fully amortized) over a period of 20
     years the contributions which would be required to be made
     under the plan but for the provisions of section
     412(c)(7)(A)(i)(I) (as in effect on the day before the
     enactment of the Pension Protection Act of 2006).
       ``(3) Credits to account.--For a plan year, the funding
     standard account shall be credited with the sum of--
       ``(A) the amount considered contributed by the employer to
     or under the plan for the plan year,
       ``(B) the amount necessary to amortize in equal annual
     installments (until fully amortized)--
       ``(i) separately, with respect to each plan year, the net
     decrease (if any) in unfunded past service liability under
     the plan arising from plan amendments adopted in such year,
     over a period of 15 plan years,
       ``(ii) separately, with respect to each plan year, the net
     experience gain (if any) under the plan, over a period of 5
     plan years, and
       ``(iii) separately, with respect to each plan year, the net
     gain (if any) resulting from changes in actuarial assumptions
     used under the plan, over a period of 10 plan years,
       ``(C) the amount of the waived funding deficiency (within
     the meaning of section 412(c)(3)) for the plan year, and
       ``(D) in the case of a plan year for which the accumulated
     funding deficiency is determined under the funding standard
     account if such plan year follows a plan year for which such
     deficiency was determined under the alternative minimum
     funding standard, the excess (if any) of any debit balance in
     the funding standard account (determined without regard to
     this subparagraph) over any debit balance in the alternative
     minimum funding standard account.
       ``(4) Combining and offsetting amounts to be amortized.--
     Under regulations prescribed by the Secretary, amounts
     required to be amortized under paragraph (2) or paragraph
     (3), as the case may be--
       ``(A) may be combined into one amount under such paragraph
     to be amortized over a period determined on the basis of the
     remaining amortization period for all items entering into
     such combined amount, and
       ``(B) may be offset against amounts required to be
     amortized under the other such paragraph, with the resulting
     amount to be amortized over a period determined on the basis
     of the remaining amortization periods for all items entering
     into whichever of the two amounts being offset is the
     greater.
       ``(5) Interest.--
       ``(A) In general.--Except as provided in subparagraph (B),
     the funding standard account (and items therein) shall be
     charged or credited (as determined under regulations
     prescribed by the Secretary) with interest at the appropriate
     rate consistent with the rate or rates of interest used under
     the plan to determine costs.
       ``(B) Exception.--The interest rate used for purposes of
     computing the amortization charge described in subsection
     (b)(2)(C) or for purposes of any arrangement under subsection
     (d) for any plan year shall be the greater of--
       ``(i) 150 percent of the Federal mid-term rate (as in
     effect under section 1274 for the 1st month of such plan
     year), or
       ``(ii) the rate of interest determined under subparagraph
     (A).
       ``(6) Amortization schedules in effect.--Amortization
     schedules for amounts described in paragraphs (2) and (3)
     that are in effect as of the last day of the last plan year
     beginning before January 1, 2014, by reason of section 104 of
     the Pension Protection Act of 2006 shall remain in effect
     pursuant to their terms and this section, except that such
     amounts shall not be amortized again under this section.
       ``(c) Special Rules.--
       ``(1) Determinations to be made under funding method.--For
     purposes of this section, normal costs, accrued liability,
     past service liabilities, and experience gains and losses
     shall be determined under the funding method used to
     determine costs under the plan.
       ``(2) Valuation of assets.--
       ``(A) In general.--For purposes of this section, the value
     of the plan's assets shall be determined on the basis of any
     reasonable actuarial method of valuation which takes into
     account fair market value and which is permitted under
     regulations prescribed by the Secretary.
       ``(B) Dedicated bond portfolio.--The Secretary may by
     regulations provide that the value of any dedicated bond
     portfolio of a plan shall be determined by using the interest
     rate under section 412(b)(5) (as in effect on the day before
     the enactment of the Pension Protection Act of 2006).
       ``(3) Actuarial assumptions must be reasonable.--For
     purposes of this section, all costs, liabilities, rates of
     interest, and other factors under the plan shall be
     determined on the basis of actuarial assumptions and
     methods--
       ``(A) each of which is reasonable (taking into account the
     experience of the plan and reasonable expectations), and
       ``(B) which, in combination, offer the actuary's best
     estimate of anticipated experience under the plan.
       ``(4) Treatment of certain changes as experience gain or
     loss.--For purposes of this section, if--
       ``(A) a change in benefits under the Social Security Act or
     in other retirement benefits created under Federal or State
     law, or
       ``(B) a change in the definition of the term `wages' under
     section 3121 or a change in the amount of such wages taken
     into account under regulations prescribed for purposes of
     section 401(a)(5),
     results in an increase or decrease in accrued liability under
     a plan, such increase or decrease shall be treated as an
     experience loss or gain.
       ``(5) Funding method and plan year.--
       ``(A) Funding methods available.--All funding methods
     available to CSEC plans under section 412 (as in effect on
     the day before the enactment of the Pension Protection Act of
     2006) shall continue to be available under this section.
       ``(B) Changes.--If the funding method for a plan is
     changed, the new funding method shall become the funding
     method used to determine costs and liabilities under the plan
     only if the change is approved by the Secretary. If the plan
     year for a plan is changed, the new plan year shall become
     the plan year for the plan only if the change is approved by
     the Secretary.
       ``(C) Approval required for certain changes in assumptions
     by certain single-employer plans subject to additional
     funding requirement.--

[[Page S538]]

       ``(i) In general.--No actuarial assumption (other than the
     assumptions described in subsection (h)(3)) used to determine
     the current liability for a plan to which this subparagraph
     applies may be changed without the approval of the Secretary.
       ``(ii) Plans to which subparagraph applies.--This
     subparagraph shall apply to a plan only if--

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

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

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

       ``(ii) Assets.--For purposes of clause (i), assets shall
     not be reduced by any credit balance in the funding standard
     account.
       ``(8) Annual valuation.--
       ``(A) In general.--For purposes of this section, a
     determination of experience gains and losses and a valuation
     of the plan's liability shall be made not less frequently
     than once every year, except that such determination shall be
     made more frequently to the extent required in particular
     cases under regulations prescribed by the Secretary.
       ``(B) Valuation date.--
       ``(i) Current year.--Except as provided in clause (ii), the
     valuation referred to in subparagraph (A) shall be made as of
     a date within the plan year to which the valuation refers or
     within one month prior to the beginning of such year.
       ``(ii) Use of prior year valuation.--The valuation referred
     to in subparagraph (A) may be made as of a date within the
     plan year prior to the year to which the valuation refers if,
     as of such date, the value of the assets of the plan are not
     less than 100 percent of the plan's current liability.
       ``(iii) Adjustments.--Information under clause (ii) shall,
     in accordance with regulations, be actuarially adjusted to
     reflect significant differences in participants.
       ``(iv) Limitation.--A change in funding method to use a
     prior year valuation, as provided in clause (ii), may not be
     made unless as of the valuation date within the prior plan
     year, the value of the assets of the plan are not less than
     125 percent of the plan's current liability.
       ``(9) Time when certain contributions deemed made.--For
     purposes of this section, any contributions for a plan year
     made by an employer during the period--
       ``(A) beginning on the day after the last day of such plan
     year, and
       ``(B) ending on the day which is 8\1/2\ months after the
     close of the plan year,
     shall be deemed to have been made on such last day.
       ``(10) Anticipation of benefit increases effective in the
     future.--In determining projected benefits, the funding
     method of a collectively bargained CSEC plan described in
     section 413(a) shall anticipate benefit increases scheduled
     to take effect during the term of the collective bargaining
     agreement applicable to the plan.
       ``(d) Extension of Amortization Periods.--The period of
     years required to amortize any unfunded liability (described
     in any clause of subsection (b)(2)(B)) of any plan may be
     extended by the Secretary for a period of time (not in excess
     of 10 years) if the Secretary determines that such extension
     would carry out the purposes of the Employee Retirement
     Income Security Act of 1974 and provide adequate protection
     for participants under the plan and their beneficiaries, and
     if the Secretary determines that the failure to permit such
     extension would result in--
       ``(1) a substantial risk to the voluntary continuation of
     the plan, or
       ``(2) a substantial curtailment of pension benefit levels
     or employee compensation.
       ``(e) Alternative Minimum Funding Standard.--
       ``(1) In general.--A CSEC plan which uses a funding method
     that requires contributions in all years not less than those
     required under the entry age normal funding method may
     maintain an alternative minimum funding standard account for
     any plan year. Such account shall be credited and charged
     solely as provided in this subsection.
       ``(2) Charges and credits to account.--For a plan year the
     alternative minimum funding standard account shall be--
       ``(A) charged with the sum of--
       ``(i) the lesser of normal cost under the funding method
     used under the plan or normal cost determined under the unit
     credit method,
       ``(ii) the excess, if any, of the present value of accrued
     benefits under the plan over the fair market value of the
     assets, and
       ``(iii) an amount equal to the excess (if any) of credits
     to the alternative minimum standard account for all prior
     plan years over charges to such account for all such years,
     and
       ``(B) credited with the amount considered contributed by
     the employer to or under the plan for the plan year.
       ``(3) Interest.--The alternative minimum funding standard
     account (and items therein) shall be charged or credited with
     interest in the manner provided under subsection (b)(5) with
     respect to the funding standard account.
       ``(f) Quarterly Contributions Required.--
       ``(1) In general.--If a CSEC plan which has a funded
     current liability percentage for the preceding plan year of
     less than 100 percent fails to pay the full amount of a
     required installment for the plan year, then the rate of
     interest charged to the funding standard account under
     subsection (b)(5) with respect to the amount of the
     underpayment for the period of the underpayment shall be
     equal to the greater of--
       ``(A) 175 percent of the Federal mid-term rate (as in
     effect under section 1274 for the 1st month of such plan
     year), or
       ``(B) the rate of interest used under the plan in
     determining costs.
       ``(2) Amount of underpayment, period of underpayment.--For
     purposes of paragraph (1)--
       ``(A) Amount.--The amount of the underpayment shall be the
     excess of--
       ``(i) the required installment, over
       ``(ii) the amount (if any) of the installment contributed
     to or under the plan on or before the due date for the
     installment.
       ``(B) Period of underpayment.--The period for which
     interest is charged under this subsection with regard to any
     portion of the underpayment shall run from the due date for
     the installment to the date on which such portion is
     contributed to or under the plan (determined without regard
     to subsection (c)(9)).
       ``(C) Order of crediting contributions.--For purposes of
     subparagraph (A)(ii), contributions shall be credited against
     unpaid required installments in the order in which such
     installments are required to be paid.
       ``(3) Number of required installments; due dates.--For
     purposes of this subsection--
       ``(A) Payable in 4 installments.--There shall be 4 required
     installments for each plan year.
       ``(B) Time for payment of installments.--



 ``In the case of the following required
              installments:                       The due date is:

1st......................................  April 15
2nd......................................  July 15
3rd......................................  October 15
4th......................................  January 15 of the following
                                            year.



[[Page S539]]

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

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

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

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

       ``(v) Liquid assets.--The term `liquid assets' means cash,
     marketable securities and such other assets as specified by
     the Secretary in regulations.
       ``(vi) Quarter.--The term `quarter' means, with respect to
     any required installment, the 3-month period preceding the
     month in which the due date for such installment occurs.
       ``(F) Regulations.--The Secretary may prescribe such
     regulations as are necessary to carry out this paragraph.
       ``(6) Fiscal years and short years.--
       ``(A) Fiscal years.--In applying this subsection to a plan
     year beginning on any date other than January 1, there shall
     be substituted for the months specified in this subsection,
     the months which correspond thereto.
       ``(B) Short plan year.--This subsection shall be applied to
     plan years of less than 12 months in accordance with
     regulations prescribed by the Secretary.
       ``(g) Imposition of Lien Where Failure To Make Required
     Contributions.--
       ``(1) In general.--In the case of a plan to which this
     section applies, if--
       ``(A) any person fails to make a required installment under
     subsection (f) or any other payment required under this
     section before the due date for such installment or other
     payment, and
       ``(B) the unpaid balance of such installment or other
     payment (including interest), when added to the aggregate
     unpaid balance of all preceding such installments or other
     payments for which payment was not made before the due date
     (including interest), exceeds $1,000,000,
     then there shall be a lien in favor of the plan in the amount
     determined under paragraph (3) upon all property and rights
     to property, whether real or personal, belonging to such
     person and any other person who is a member of the same
     controlled group of which such person is a member.
       ``(2) Plans to which subsection applies.--This subsection
     shall apply to a CSEC plan for any plan year for which the
     funded current liability percentage of such plan is less than
     100 percent. This subsection shall not apply to any plan to
     which section 4021 of the Employee Retirement Income Security
     Act of 1974 does not apply (as such section is in effect on
     the date of the enactment of the Retirement Protection Act of
     1994).
       ``(3) Amount of lien.--For purposes of paragraph (1), the
     amount of the lien shall be equal to the aggregate unpaid
     balance of required installments and other payments required
     under this section (including interest)--
       ``(A) for plan years beginning after 1987, and
       ``(B) for which payment has not been made before the due
     date.
       ``(4) Notice of failure; lien.--
       ``(A) Notice of failure.--A person committing a failure
     described in paragraph (1) shall notify the Pension Benefit
     Guaranty Corporation of such failure within 10 days of the
     due date for the required installment or other payment.
       ``(B) Period of lien.--The lien imposed by paragraph (1)
     shall arise on the due date for the required installment or
     other payment and shall continue until the last day of the
     first plan year in which the plan ceases to be described in
     paragraph (1)(B). Such lien shall continue to run without
     regard to whether such plan continues to be described in
     paragraph (2) during the period referred to in the preceding
     sentence.
       ``(C) Certain rules to apply.--Any amount with respect to
     which a lien is imposed under paragraph (1) shall be treated
     as taxes due and owing the United States and rules similar to
     the rules of subsections (c), (d), and (e) of section 4068 of
     the Employee Retirement Income Security Act of 1974 shall
     apply with respect to a lien imposed by subsection (a) and
     the amount with respect to such lien.
       ``(5) Enforcement.--Any lien created under paragraph (1)
     may be perfected and enforced only by the Pension Benefit
     Guaranty Corporation, or at the direction of the Pension
     Benefit Guaranty Corporation, by any contributing employer
     (or any member of the controlled group of the contributing
     employer).
       ``(6) Definitions.--For purposes of this subsection--
       ``(A) Due date; required installment.--The terms `due date'
     and `required installment' have the meanings given such terms
     by subsection (f), except that in the case of a payment other
     than a required installment, the due date shall be the date
     such payment is required to be made under this section.
       ``(B) Controlled group.--The term `controlled group' means
     any group treated as a single employer under subsections (b),
     (c), (m), and (o) of section 414.
       ``(h) Current Liability.--For purposes of this section--
       ``(1) In general.--The term `current liability' means all
     liabilities to employees and their beneficiaries under the
     plan.
       ``(2) Treatment of unpredictable contingent event
     benefits.--
       ``(A) In general.--For purposes of paragraph (1), any
     unpredictable contingent event benefit shall not be taken
     into account until the event on which the benefit is
     contingent occurs.
       ``(B) Unpredictable contingent event benefit.--The term
     `unpredictable contingent event benefit' means any benefit
     contingent on an event other than--
       ``(i) age, service, compensation, death, or disability, or
       ``(ii) an event which is reasonably and reliably
     predictable (as determined by the Secretary).
       ``(3) Interest rate and mortality assumptions used.--
       ``(A) Interest rate.--The rate of interest used to
     determine current liability under this section shall be the
     third segment rate determined under section 430(h)(2)(C).
       ``(B) Mortality tables.--
       ``(i) Secretarial authority.--The Secretary may by
     regulation prescribe mortality tables to be used in
     determining current liability under this subsection. Such
     tables shall be based upon the actual experience of pension
     plans and projected trends in such experience. In prescribing
     such tables, the Secretary shall take into account results of
     available independent studies of mortality of individuals
     covered by pension plans.
       ``(ii) Periodic review.--The Secretary shall periodically
     (at least every 5 years) review any tables in effect under
     this subsection and shall, to the extent the Secretary
     determines necessary, by regulation update the tables to
     reflect the actual experience of pension plans and projected
     trends in such experience.
       ``(C) Separate mortality tables for the disabled.--
     Notwithstanding subparagraph (B)--

[[Page S540]]

       ``(i) In general.--In the case of plan years beginning
     after December 31, 1995, the Secretary shall establish
     mortality tables which may be used (in lieu of the tables
     under subparagraph (B)) to determine current liability under
     this subsection for individuals who are entitled to benefits
     under the plan on account of disability. The Secretary shall
     establish separate tables for individuals whose disabilities
     occur in plan years beginning before January 1, 1995, and for
     individuals whose disabilities occur in plan years beginning
     on or after such date.
       ``(ii) Special rule for disabilities occurring after
     1994.--In the case of disabilities occurring in plan years
     beginning after December 31, 1994, the tables under clause
     (i) shall apply only with respect to individuals described in
     such subclause who are disabled within the meaning of title
     II of the Social Security Act and the regulations thereunder.
       ``(4) Certain service disregarded.--
       ``(A) In general.--In the case of a participant to whom
     this paragraph applies, only the applicable percentage of the
     years of service before such individual became a participant
     shall be taken into account in computing the current
     liability of the plan.
       ``(B) Applicable percentage.--For purposes of this
     subparagraph, the applicable percentage shall be determined
     as follows:



                                           The applicable percentage is:
  ``If the years of participation  are:

1........................................  20
2........................................  40
3........................................  60
4........................................  80
5 or more................................  100.


       ``(C) Participants to whom paragraph applies.--This
     subparagraph shall apply to any participant who, at the time
     of becoming a participant--
       ``(i) has not accrued any other benefit under any defined
     benefit plan (whether or not terminated) maintained by the
     employer or a member of the same controlled group of which
     the employer is a member,
       ``(ii) who first becomes a participant under the plan in a
     plan year beginning after December 31, 1987, and
       ``(iii) has years of service greater than the minimum years
     of service necessary for eligibility to participate in the
     plan.
       ``(D) Election.--An employer may elect not to have this
     subparagraph apply. Such an election, once made, may be
     revoked only with the consent of the Secretary.
       ``(i) Funded Current Liability Percentage.--For purposes of
     this section, the term `funded current liability percentage'
     means, with respect to any plan year, the percentage which--
       ``(1) the value of the plan's assets determined under
     subsection (c)(2), is of
       ``(2) the current liability under the plan.
       ``(j) Funding Restoration Status.--Notwithstanding any
     other provisions of this section--
       ``(1) Normal cost payment.--
       ``(A) In general.--In the case of a CSEC plan that is in
     funding restoration status for a plan year, for purposes of
     section 412, the term `accumulated funding deficiency' means,
     for such plan year, the greater of--
       ``(i) the amount described in subsection (a), or
       ``(ii) the excess of the normal cost of the plan for the
     plan year over the amount actually contributed to or under
     the plan for the plan year.
       ``(B) Normal cost.--In the case of a CSEC plan that uses a
     spread gain funding method, for purposes of this subsection,
     the term `normal cost' means normal cost as determined under
     the entry age normal funding method.
       ``(2) Plan amendments.--In the case of a CSEC plan that is
     in funding restoration status for a plan year, no amendment
     to such plan may take effect during such plan year if such
     amendment has the effect of increasing liabilities of the
     plan by means of increases in benefits, establishment of new
     benefits, changing the rate of benefit accrual, or changing
     the rate at which benefits become nonforfeitable. This
     paragraph shall not apply to any plan amendment that is
     required to comply with any applicable law. This paragraph
     shall cease to apply with respect to any plan year, effective
     as of the first day of the plan year (or if later, the
     effective date of the amendment) upon payment by the plan
     sponsor of a contribution to the plan (in addition to any
     contribution required under this section without regard to
     this paragraph) in an amount equal to the increase in the
     funding liability of the plan attributable to the plan
     amendment.
       ``(3) Funding restoration plan.--The sponsor of a CSEC plan
     shall establish a written funding restoration plan within 180
     days of the receipt by the plan sponsor of a certification
     from the plan actuary that the plan is in funding restoration
     status for a plan year. Such funding restoration plan shall
     consist of actions that are calculated, based on reasonably
     anticipated experience and reasonable actuarial assumptions,
     to increase the plan's funded percentage to 100 percent over
     a period that is not longer than the greater of 7 years or
     the shortest amount of time practicable. Such funding
     restoration plan shall take into account contributions
     required under this section (without regard to this
     paragraph). If a plan remains in funding restoration status
     for 2 or more years, such funding restoration plan shall be
     updated each year after the 1st such year within 180 days of
     receipt by the plan sponsor of a certification from the plan
     actuary that the plan remains in funding restoration status
     for the plan year.
       ``(4) Annual certification by plan actuary.--Not later than
     the 90th day of each plan year of a CSEC plan, the plan
     actuary shall certify to the plan sponsor whether or not the
     plan is in funding restoration status for the plan year,
     based on the plan's funded percentage as of the beginning of
     the plan year. For this purpose, the actuary may conclusively
     rely on an estimate of--
       ``(A) the plan's funding liability, based on the funding
     liability of the plan for the preceding plan year and on
     reasonable actuarial estimates, assumptions, and methods, and
       ``(B) the amount of any contributions reasonably
     anticipated to be made for the preceding plan year.
     Contributions described in subparagraph (B) shall be taken
     into account in determining the plan's funded percentage as
     of the beginning of the plan year.
       ``(5) Definitions.--For purposes of this subsection--
       ``(A) Funding restoration status.--A CSEC plan shall be
     treated as in funding restoration status for a plan year if
     the plan's funded percentage as of the beginning of such plan
     year is less than 80 percent.
       ``(B) Funded percentage.--The term `funded percentage'
     means the ratio (expressed as a percentage) which--
       ``(i) the value of plan assets (as determined under
     subsection (c)(2)), bears to
       ``(ii) the plan's funding liability.
       ``(C) Funding liability.--The term `funding liability' for
     a plan year means the present value of all benefits accrued
     or earned under the plan as of the beginning of the plan
     year, based on the assumptions used by the plan pursuant to
     this section, including the interest rate described in
     subsection (b)(5)(A) (without regard to subsection
     (b)(5)(B)).
       ``(D) Spread gain funding method.--The term `spread gain
     funding method' has the meaning given such term under rules
     and forms issued by the Secretary.
       ``(E) Plan sponsor.--The term `plan sponsor' means, with
     respect to a CSEC plan, the association, committee, joint
     board of trustees, or other similar group of representatives
     of the parties who establish or maintain the plan.''.
       (b) CSEC Plans.--Section 413 of the Internal Revenue Code
     of 1986 is amended by adding at the end the following new
     subsection:
       ``(d) CSEC Plans.--Notwithstanding any other provision of
     this section, in the case of a CSEC plan--
       ``(1) Funding.--The requirements of section 412 shall be
     determined as if all participants in the plan were employed
     by a single employer.
       ``(2) Application of provisions.--Paragraphs (1), (2), (3),
     and (5) of subsection (c) shall apply.
       ``(3) Deduction limitations.--Each applicable limitation
     provided by section 404(a) shall be determined as if all
     participants in the plan were employed by a single employer.
     The amounts contributed to or under the plan by each employer
     who maintains the plan (for the portion of the taxable year
     included within a plan year) shall be considered not to
     exceed such applicable limitation if the anticipated employer
     contributions for such plan year of all employers (determined
     in a reasonable manner not inconsistent with regulations
     prescribed by the Secretary) do not exceed such limitation.
     If such anticipated contributions exceed such limitation, the
     portion of each such employer's contributions which is not
     deductible under section 404 shall be determined in
     accordance with regulations prescribed by the Secretary.
       ``(4) Allocations.--Allocations of amounts under paragraph
     (3) and subsection (c)(5) among the employers maintaining the
     plan shall not be inconsistent with the regulations
     prescribed for this purpose by the Secretary.''.
       (c) Separate Rules for Csec Plans.--

[[Page S541]]

       (1) In general.--Paragraph (2) of section 412(a) of the
     Internal Revenue Code of 1986 is amended by striking ``and''
     at the end of subparagraph (B), by striking the period at the
     end of subparagraph (C) and inserting ``, and'', and by
     inserting at the end thereof the following new subparagraph:
       ``(D) in the case of a CSEC plan, the employers make
     contributions to or under the plan for any plan year which,
     in the aggregate, are sufficient to ensure that the plan does
     not have an accumulated funding deficiency under section 433
     as of the end of the plan year.''.
       (2) Conforming amendments.--Section 412 of such Code is
     amended--
       (A) by striking ``multiemployer plan'' in paragraph (A) of
     subsection (a)(2), in clause (i) of subsection (c)(1)(B), the
     first place it appears in clause (i) of subsection (c)(1)(A),
     and the last place it appears in paragraph (2) of subsection
     (d), and inserting ``multiemployer plan or a CSEC plan'',
       (B) by striking ``430(j)'' in paragraph (1) of subsection
     (b) and inserting ``430(j) or under section 433(f)'',
       (C)(i) by striking ``and'' at the end of clause (i) of
     subsection (c)(1)(B),
       (ii) by striking the period at the end of clause (ii) of
     subsection (c)(1)(B) and inserting ``, and'', and
       (iii) by inserting the following new clause after clause
     (ii) of subsection (c)(1)(B):
       ``(iii) in the case of a CSEC plan, the funding standard
     account shall be credited under section 433(b)(3)(C) with the
     amount of the waived funding deficiency and such amount shall
     be amortized as required under section 433(b)(2)(C).'',
       (D) by striking ``under paragraph (1)'' in clause (i) of
     subsection (c)(4)(A) and inserting ``under paragraph (1) or
     for granting an extension under section 433(d)'',
       (E) by striking ``waiver under this subsection'' in
     subparagraph (B) of subsection (c)(4) and inserting ``waiver
     under this subsection or an extension under 433(d)'',
       (F) by striking ``waiver or modification'' in subclause (I)
     of subsection (c)(4)(B)(i) and inserting ``waiver,
     modification, or extension'',
       (G) by striking ``waivers'' in the heading of subsection
     (c)(4)(C) and of clause (ii) of subsection (c)(4)(C) and
     inserting ``waivers or extensions'',
       (H) by striking ``section 431(d)'' in subparagraph (A) of
     subsection (c)(7) and in paragraph (2) of subsection (d) and
     inserting ``section 431(d) or section 433(d)'',
       (I) by striking ``and'' at the end of subclause (I) of
     subsection (c)(4)(C)(i) and inserting ``or the accumulated
     funding deficiency under section 433, whichever is
     applicable,'',
       (J) by striking ``430(e)(2),'' in subclause (II) of
     subsection (c)(4)(C)(i) and inserting ``430(e)(2) or
     433(b)(2)(C), whichever is applicable, and'',
       (K) by adding immediately after subclause (II) of
     subsection (c)(4)(C)(i) the following new subclause:

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

       (L) by striking ``for waivers of'' in clause (ii) of
     subsection (c)(4)(C) and inserting ``for waivers or
     extensions with respect to''.
       (3) Benefit restrictions.--
       (A) In general.--Paragraph (29) of section 401(a) of such
     Code is amended by striking ``multiemployer plan'' and
     inserting ``multiemployer plan or a CSEC plan''.
       (B) Conforming change.--Subsection (a) of section 436 of
     such Code is amended by striking ``single-employer plan'' and
     inserting ``single-employer plan (other than a CSEC plan)''.
       (4) Benefit increases.--Subparagraph (C) of section
     401(a)(33) of such Code is amended by striking
     ``multiemployer plans'' and inserting ``multiemployer plans
     or CSEC plans''.
       (5) Liquidity shortfalls.--
       (A) In general.--Subparagraph (A) of section 401(a)(32) of
     such Code is amended by striking ``430(j)(4)'' each place it
     appears and inserting ``430(j)(4) or 433(f)(5)''.
       (B) Period of shortfall.--Subparagraph (C) of section
     401(a)(32) of such Code is amended by striking ``430(j)(3) by
     reason of section 430(j)(4)(A) thereof'' and inserting
     ``430(j)(3) or 433(f) by reason of section 430(j)(4)(A) or
     433(f)(5), respectively''.
       (6) Deduction limits.--Subsection (o) of section 404 of
     such Code is amended by adding at the end the following new
     paragraph:
       ``(8) CSEC plans.--Solely for purposes of this subsection,
     a CSEC plan shall be treated as though section 430 applied to
     such plan and the minimum required contribution for any plan
     year shall be the amount described in section
     412(a)(2)(D).''.
       (7) Section 420.--Paragraph (5) of section 420(e) of such
     Code is amended by striking ``section 430'' each place it
     appears and inserting ``sections 430 and 433''.
       (8) Coordination with section 4971.--
       (A) Subsection (a) of section 4971 of such Code is amended
     by striking ``and'' at the end of paragraph (1), by striking
     the period at the end of paragraph (2) and inserting ``,
     and'', and by adding at the end thereof the following new
     paragraph:
       ``(3) in the case of a CSEC plan, 10 percent of the CSEC
     accumulated funding deficiency as of the end of the plan year
     ending with or within the taxable year.''.
       (B) Subsection (b) of section 4971 of such Code is
     amended--
       (i) by striking ``or'' at the end of paragraph (1), by
     adding ``or'' at the end of paragraph (2), and by inserting
     immediately after paragraph (2) the following new paragraph:
       ``(3) a tax is imposed under subsection (a)(3) on any CSEC
     accumulated funding deficiency and the CSEC accumulated
     funding deficiency is not corrected within the taxable
     period,'', and
       (ii) by striking ``minimum required contributions or
     accumulated funding deficiency'' and inserting ``minimum
     required contribution, accumulated funding deficiency, or
     CSEC accumulated funding deficiency''.
       (C) Subsection (c) of section 4971 of such Code is
     amended--
       (i) by striking ``accumulated funding deficiency'' each
     place it appears in paragraph (2) and inserting ``accumulated
     funding deficiency or CSEC accumulated funding deficiency'',
       (ii) by striking ``accumulated funding deficiency or unpaid
     minimum required contribution'' each place it appears in
     paragraph (3) and inserting ``accumulated funding deficiency,
     CSEC accumulated funding deficiency, or unpaid minimum
     required contribution'', and
       (iii) by adding at the end the following new paragraph:
       ``(5) CSEC accumulated funding deficiency.--The term `CSEC
     accumulated funding deficiency' means the accumulated funding
     deficiency determined under section 433.''.
       (D) Paragraph (1) of section 4971(d) of such Code is
     amended by striking ``accumulated funding deficiency or
     unpaid minimum required contribution'' and inserting
     ``accumulated funding deficiency, CSEC accumulated funding
     deficiency, or unpaid minimum required contribution''.
       (E) Subsection (f) of section 4971 of such Code is
     amended--
       (i) by striking ``430(j)(4)'' in paragraph (1) and
     inserting ``430(j)(4) or 433(f)'',
       (ii) by striking ``430(j)'' in paragraph (1)(B) and
     inserting ``430(j) or 433(f), whichever is applicable'', and
       (iii) by striking ``412(m)(5)'' in paragraph (3)(A) and
     inserting ``430(j) or 433(f), whichever is applicable''.
       (9) Excise tax on failure to adopt funding restoration
     plan.--Section 4971 of such Code is amended by redesignating
     subsection (h) as subsection (i), and by inserting after
     subsection (g) the following new subsection:
       ``(h) Failure of a CSEC Plan Sponsor to Adopt Funding
     Restoration Plan.--
       ``(1) In general.--In the case of a CSEC plan that is in
     funding restoration status (within the meaning of section
     433(j)(5)(A)), there is hereby imposed a tax on the failure
     of such plan to adopt a funding restoration plan within the
     time prescribed under section 433(j)(3).
       ``(2) Amount of tax.--The amount of the tax imposed under
     paragraph (1) with respect to any plan sponsor for any
     taxable year shall be the amount equal to $100 multiplied by
     the number of days during the taxable year which are included
     in the period beginning on the day following the close of the
     180-day period described in section 433(j)(3) and ending on
     the day on which the funding restoration plan is adopted.
       ``(3) Waiver by secretary.--In the case of a failure
     described in paragraph (1) which the Secretary determines is
     due to reasonable cause and not to willful neglect, the
     Secretary may waive a portion or all of the tax imposed by
     such paragraph.
       ``(4) Liability for tax.--The tax imposed by paragraph (1)
     shall be paid by the plan sponsor (within the meaning of
     section 433(j)(5)(E)).''.
       (10) Reporting.--
       (A) In general.--Paragraph (2) of section 6059(b) of such
     Code is amended by striking ``430,'' and inserting ``430, the
     accumulated funding deficiency under section 433,''.
       (B) Assumptions.--Subparagraph (B) of section 6059(b)(3) of
     such Code is amended by striking ``430(h)(1) or 431(c)(3)''
     and inserting ``430(h)(1), 431(c)(3), or 433(c)(3)''.

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

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

                                 ______