[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 1492 Introduced in Senate (IS)]
108th CONGRESS
1st Session
S. 1492
To amend the Employee Retirement Income Security Act of 1974, the
Internal Revenue Code of 1986, and the Labor Management Relations Act,
1947 to provide special rules for Teamster plans relating to
termination and funding.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
July 30 (legislative day, July 21), 2003
Mr. Chambliss introduced the following bill; which was read twice and
referred to the Committee on Health, Education, Labor, and Pensions
_______________________________________________________________________
A BILL
To amend the Employee Retirement Income Security Act of 1974, the
Internal Revenue Code of 1986, and the Labor Management Relations Act,
1947 to provide special rules for Teamster plans relating to
termination and funding.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Multiemployer Pension Security Act
of 2003''.
SEC. 2. AMENDMENTS TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974 RELATING TO TERMINATION INSURANCE PROGRAM.
(a) Teamster Plan Defined.--Section 4001(a) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1301(a)) is amended--
(1) in paragraph (21), by striking the period at the end
and inserting ``; and''; and
(2) by adding at the end the following new paragraph:
``(22) `teamster plan' means a plan--
``(A) to which more than one employer is required
to contribute,
``(B) which is maintained pursuant to one or more
collective bargaining agreements between The
International Brotherhood of Teamsters, Chauffeurs,
Warehousemen and Helpers of America or its locals and
more than one employer, and
``(C) which satisfies such other requirements as
the Secretary of Labor may prescribe by regulation.''.
(b) Modification of Liability Provisions.--
(1) Amounts payable by the corporation.--Section 4061 of
such Act (29 U.S.C. 1361) is amended by striking ``subtitle B''
and inserting ``subtitles B and G'' in the first sentence
thereof and inserting ``or subtitle G'' after ``4022A'' in the
third sentence thereof.
(2) Liability under distress termination or a termination
by the corporation.--Section 4062 of such Act (29 U.S.C. 1362)
is amended by inserting ``or subtitle G'' after ``4041(c)'' in
subsection (a) thereof.
(c) Modification of Enforcement Provisions.--Section 4070 of such
Act (29 U.S.C. 1370) is amended--
(1) by inserting ``AND TEAMSTER PLANS'' after ``SINGLE-
EMPLOYER PLANS'' in the title thereof;
(2) by inserting at the end of subsection (a) the following
flush sentence:
``A plan fiduciary, contributing sponsor, member of a contributing
sponsor's controlled group, participant, or beneficiary who is
adversely affected by the act or omission of any party (other than the
corporation) under subtitle G with respect to a teamster plan, or an
employee organization which represents such a plan participant or
beneficiary for purposes of collective bargaining, may bring an action
for appropriate legal or equitable relief, or both.'';
(3) by inserting in each of subsections (a) and (b) ``or a
teamster plan'' after ``single-employer plan'' each time it
appears in each such subsection; and
(4) by inserting ``, and in the case of a teamster plan,
where the defendant does business'' at the end of the second
sentence of subsection (c).
(d) Special Provisions for Teamster Plans.--
(1) In general.--Title IV of such Act (29 U.S.C. 1301 et
seq.) is amended by adding at the end the following new
subtitle:
``Subtitle G--Special Provisions for Teamster Plans
``SEC. 4501. TREATMENT OF TEAMSTER PLANS.
``(a) General Rule.--For purposes of this title, a teamster plan
shall not be treated as a multiemployer plan, and each employer that
has an obligation to contribute to a teamster plan shall be treated as
a contributing sponsor maintaining a separate single-employer plan, as
provided in this subtitle.
``(b) Partition of Liabilities.--
``(1) In general.--As of the first day of the first plan
year for which this subtitle is effective, the transition
liabilities of each teamster plan shall be allocated among
those persons that are, as of such date, the contributing
employers of the plan, in accordance with this subsection.
``(2) Transition liabilities.--For purposes of this
subtitle, `transition liabilities' means the sum of--
``(A) the accrued liability for the benefits under
the plan (as a whole, as if such plan were treated as a
single multiemployer plan rather than a collection of
single-employer plans but taking into account the
requirements of section 308) attributable as of the
first day of the first plan year for which this
subtitle is effective to participants who, as of such
date, are not employed in credited service for any
employer under such plan, and
``(B) the accrued liability for the benefits under
the plan (as a whole, as if such plan were treated as a
single multiemployer plan rather than a collection of
single-employer plans but taking into account the
requirements of section 308) attributable, as of the
first day of the first plan year for which this
subtitle is effective, to the credited service of
participants (other than participants described in (A))
with an employer that, as of such date, does not have
an obligation to contribute to the teamster plan.
``(3) Method of allocation.--
``(A) Transition liabilities shall be allocated
under paragraph (1) with respect to each teamster plan
among those employers who have an obligation to make
contributions to such plan as of the first day of the
first plan year for which this subtitle is effective.
``(B) Each employer's share of the transition
liabilities shall equal the product derived by
multiplying--
``(i) the transition liabilities of the
plan (as a whole, as if such plan were treated
as a single multiemployer plan rather than a
collection of single-employer plans, but taking
into account the requirements of section 308),
by
``(ii) a percentage determined as of the
first day of the first plan year for which this
subtitle is effective by dividing--
``(I) the sum of the contributions
required to be made under such plan by
the employer for the 5 preceding plan
years, by
``(II) the sum of the contributions
required to be made by all such
employers for the 5 preceding plan
years.
``(4) Anticipation of benefit increases.--For purposes of
this subsection, in determining accrued liability, the funding
method of a plan shall anticipate benefit increases scheduled
to take effect during the term of the collective bargaining
agreement or agreements applicable to the plan.
``(c) Partition of Assets.--
``(1) In general.--As of the first day of the first plan
year for which this subtitle is effective, the assets of each
teamster plan shall be allocated among those persons who are,
as of such date, the contributing employers of the plan, in
accordance with this subsection.
``(2) Method of allocation.--The assets of the teamster
plan shall be allocated, based on fair market value as of the
first day of the first plan year for which this subtitle is
effective, among those employers who have, as of such date, an
obligation to contribute to the plan. The portion allocated to
each such employer shall be equal to the product derived by
multiplying--
``(A) the funded percentage for the teamster plan,
by
``(B) the employer's share of the accrued liability
for the plan (as a whole, as if such plan were treated
as a single multiemployer plan rather than a collection
of single-employer plans but taking into account the
requirements of section 308), as of such date.
``(3) Funded percentage.--For purposes of this subsection,
`funded percentage', in connection with a plan, means the
percentage obtained by dividing--
``(A) the fair market value of plan assets (as a
whole, as if such plan were treated as a single
multiemployer plan rather than a collection of single-
employer plans but taking into account the requirements
of section 308), including receivables, as of the first
day of the first plan year for which this subtitle is
effective, by
``(B) the accrued liability for the plan (as a
whole, as if such plan were treated as a single
multiemployer plan rather than a collection of single-
employer plans but taking into account the requirements
of section 308), as of such date.
``(4) Investment of plan assets.--The assets of a teamster
plan shall be invested by the trustees as one master trust and
each contributing employer's share of the assets of the plan
shall be adjusted annually according to master trust accounting
principles for the employer's plan contributions, benefit
payments with respect to its ongoing liability and transition
liability (if any), and share of investment returns and
administrative expenses.
``(5) Anticipation of benefit increases.--For purposes of
this subsection, in determining accrued liability, the funding
method of a plan shall anticipate benefit increases scheduled
to take effect during the term of the collective bargaining
agreement(s) applicable to the plan.
``(d) Single-Employer Plan Benefits Guaranteed.--Notwithstanding
any limitations otherwise applicable under section 4022(b), the
corporation shall guarantee 100 percent of the transition liabilities
of each teamster plan.
``(e) Premium Rates.--
``(1) In general.--For purposes of section 4006--
``(A) the premium rates charged by the corporation
for teamster plans shall be the same as the premium
rates charged by the corporation for single-employer
plans, and
``(B) each employer that has an obligation to
contribute to a teamster plan shall be responsible for
paying the premiums attributable to the single-employer
plan the employer is treated as maintaining pursuant to
this subtitle.
``(2) Phase-in of additional premium.--The amount of the
additional premium determined under section 4006(a)(3)(E) with
respect to a teamster plan shall be phased in over 10 plan
years, beginning with the first plan year for which this
subtitle is effective, so that the additional premium shall
take effect during the 10-year period in annual increments
taking effect for each year, each of which is equal to 10
percent of the full increase that would otherwise apply for
such plan year, resulting in application of the full additional
premium effective with the final plan year in such period and
each plan year thereafter.
``(3) Contribution of premiums to teamster plan.--The
corporation may allow an employer to contribute all or part of
the additional premium determined under section 4006(a)(3)(E)
directly to the teamster plan, in lieu of payment to the
corporation, to the extent that the corporation determines in
its discretion that such contribution would be in the best
interests of participants and beneficiaries.
``(f) Plan Termination.--
``(1) In general.--An employer that has an obligation to
contribute to a teamster plan may terminate its participation
in such plan in either a standard termination or a distress
termination, as provided in this subsection.
``(2) Standard termination.--An employer that has an
obligation to contribute to a teamster plan may terminate its
participation in such plan in a standard termination by
following procedures established by the corporation similar to
those that apply to a plan administrator in a standard
termination of a single-employer plan under section 4041. For
purposes of this paragraph, the employer shall be deemed to
have satisfied its obligations to the teamster plan if--
``(A) the employer obtains an irrevocable
commitment from an insurer satisfactory to the
corporation to pay its benefit liabilities under such
plan, or
``(B) the corporation agrees to assume the
employer's obligation to contribute to the plan and
make contributions under the teamster plan pursuant to
such terms and conditions as shall be satisfactory to
the corporation and the teamster plan.
``(3) Distress termination.--An employer that has an
obligation to contribute to a teamster plan may terminate its
participation in such plan in a distress termination by
following procedures established by the corporation similar to
those that apply to a plan administrator in a distress
termination of a single-employer plan under section 4041,
including meeting the necessary distress criteria under
principles similar to those described in section 4041(c)(2)(B).
``(4) Application of certain termination provisions.--Upon
an employer's termination of its participation in a teamster
plan in either a standard termination or a distress
termination, sections 4044, 4045, 4046, and 4050 shall apply to
the plan administrator of such plan in a manner consistent with
the treatment of such employer as a contributing sponsor of a
single-employer plan under this subtitle. The corporation may
institute termination proceedings against a teamster plan or an
employer's participation in a teamster plan under section 4042,
and the provisions of such section shall be applied to such
termination proceedings in a manner consistent with the
treatment of the teamster plan as a collection of single-
employer plans.
``(5) Contribution of assets remaining after standard
termination to liabilities of other contributing employers.--
Any assets that remain allocated under a teamster plan to an
employer after the termination of the employer's participation
in the plan in a standard termination under paragraph (2) shall
be applied on a pro rata basis toward satisfaction of the
benefit liabilities of the remaining employers that contribute
to the teamster plan based on such liabilities.
``(g) Obligation To Furnish Information.--The trustees of a
teamster plan shall furnish to each employer that has an obligation to
contribute to such plan, within 30 days of an employer's written
request, such reports, records, documents, or other information as the
employer reasonably determines are necessary to enable the employer to
determine the liabilities and assets of the teamster plan attributable
to such employer and to comply with such employer's funding obligations
under section 308. The trustees shall be personally liable to an
employer for any failure to furnish such information required to be
furnished under this subsection and may in the court's discretion be
liable to such employer in the amount of up to $100 a day from the date
of such failure, and the court may in its discretion order such other
relief as it deems proper. In any action under this subsection, the
court in its discretion may allow a reasonable attorney's fee and costs
of action to either party.''.
(2) Clerical amendment.--The table of contents in section 1
of such Act is amended--
(A) by amending the item relating to section 4070
to read as follows:
``Sec. 4070. Enforcement authority relating to terminations of single-
employer plans and teamster plans.''.
and
(B) by adding at the end the following new items:
``Subtitle G--Special Provisions for Teamster Plans
``Sec. 4501. Treatment of teamster plans.''.
(e) Effective Date.--The amendments made by this section shall
apply to plan years beginning after December 31, 2003.
SEC. 3. AMENDMENTS TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT
RELATING TO FUNDING REQUIREMENTS.
(a) Notice Requirement Relating to Failure to Meet Minimum Funding
Standard.--Section 101(d) of the Employee Retirement Income Security
Act of 1974 (29 U.S.C. 1021(d)) is amended by adding at the end the
following new paragraph:
``(4) Teamster plans.--For purposes of this subsection,
effective as of the funding effective date (as defined in
section 308(b)(11)), a teamster plan (as defined in section
4001(a)(22)) shall not be treated as a multiemployer plan, and
each employer that has an obligation to contribute to a
teamster plan shall be treated as an employer maintaining a
separate single-employer plan, as provided in section 308.''.
(b) Rule Relating to Prohibition on Benefit Increases While Sponsor
in Bankruptcy.--Section 204(i) of such Act (29 U.S.C. 1054(i)) is
amended--
(1) by redesignating paragraph (4) as paragraph (5); and
(2) by inserting after paragraph (3) the following new
paragraph:
``(4) Special rule for teamster plans.--For purposes of
this subsection, a teamster plan (as defined in section
4001(a)(22)) shall not be treated as a multiemployer plan. This
subsection shall be applied separately with respect to each
employer that has an obligation to contribute to a teamster
plan, and the funded current liability percentage for purposes
of paragraph (3) shall be determined in accordance with section
308.''.
(c) Special Funding Rules for Teamster Plans.--
(1) In general.--Part 3 of subtitle B of title I of such
Act is amended--
(A) by redesignating section 308 (29 U.S.C. 1086)
as section 309; and
(B) by inserting after section 307 (29 U.S.C.
1085b) the following new section:
``SEC. 308. TEAMSTER PLANS.
``(a) In General.--For purposes of this part other than section
302(d), a teamster plan within the meaning of section 4001(a)(22) shall
not be treated as a multiemployer plan, and each employer that has an
obligation to contribute to a teamster plan shall be treated as a
contributing sponsor maintaining a single-employer plan, subject to the
special rules of subsection (b).
``(b) Special Rules.--
``(1) Funding standard account.--A funding standard account
shall be established and maintained for each employer that has
an obligation to contribute to a teamster plan. In determining
the funding standard account under section 302(b) for each such
employer--
``(A) subsections (b)(2)(B)(i) and (b)(2)(B)(ii) of
section 302 shall not apply;
``(B) in the case of a teamster plan in effect on
the first day of the first plan year for which this
section is effective, the funding standard account
shall be charged with--
``(i) the amount necessary to amortize in
equal annual installments (until fully
amortized) the employer's unfunded past service
liability over a period of 30 plan years, and
``(ii) the amount necessary to amortize
over a period of 10 plan years in equal annual
installments (until fully amortized) the credit
determined under section 308(b)(1)(C)(ii) for
the immediately preceding plan year; and
``(C) in the case of a teamster plan in effect on
the first day of the first plan year for which this
section is effective, the funding standard account
shall be credited with--
``(i) the amount necessary to amortize in
equal annual installments (until fully
amortized) the excess (if any) of the
employer's initial market value of assets over
the employer's teamster plan accrued liability
determined as of the first day of the first
plan year for which this section is effective,
over a period of 30 plan years, and
``(ii) for an employer who has made its
negotiated contribution for a plan year
beginning after December 31, 2003, and before
the funding effective date, the excess (if any)
of--
``(I) the minimum funding
requirement determined under this
section for such plan year, over
``(II) the actual contribution made
to the plan for any such plan year.
``(2) Valuation of assets.--For purposes of section
302(c)(2)(A), the actuarial value of assets of a teamster plan
as of the first day of the first plan year for which this
section is effective shall be the fair market value of such
assets as of such date. The value of the assets attributable to
each employer shall be adjusted annually according to
principles of master trust accounting for the employer's plan
contributions, investment income (and loss), the employer's
benefit payments with respect to its ongoing liability and
transition liability (if any), and the employer's share of
administrative expenses. Prospective investment experience may
be reflected in accordance with section 302(c)(2) or any
applicable regulations issued by the Secretary of the Treasury.
``(3) Election with respect to bonds.--The special election
described in section 302(c)(2)(B) shall not apply.
``(4) Certain retroactive plan amendments.--Notwithstanding
any other provision of this section, a teamster plan shall be
treated as a multiemployer plan for purposes of section
302(c)(8)(A).
``(5) Benefits may not be increased unless teamster plan is
sufficiently funded.--In addition to the requirements of
section 304(b)(1), no amendment of a teamster plan which
increases the liabilities of the plan with respect to an
employer by reason of any increase in benefits, any change
in the accrual of benefits, or any change in the rate at which benefits
become nonforfeitable under the plan shall be adopted and no increase
in benefits attributable to an existing provision of a teamster plan
(other than an increase that results solely from an increase in a
participant's compensation, age or service or other similar factor),
including an increase in benefits attributable to an increase in the
negotiated contribution, shall take effect unless at the time such
increase otherwise would be effective--
``(A) the percentage determined by dividing--
``(i) the lesser of the fair market value
of the assets and the actuarial value of the
assets attributable to the employer for the
plan year in which the increase otherwise would
be effective, by
``(ii) the employer's teamster plan current
liability (determined using the highest rate of
interest which is allowable for the plan year
under section 302(d)(7)(C)) for the plan year
in which the increase otherwise would be
effective,
is at least 90 percent, and
``(B) the percentage determined by dividing--
``(i) the amount described in subparagraph
(A)(i), by
``(ii) the sum of--
``(I) the amount described in
subparagraph (A)(ii), and
``(II) the increase in the present
value of future service benefits
(taking into account the amendment or
other circumstance resulting in such
increase), determined using the highest
rate of interest which is allowable for
the plan year under section
302(d)(7)(C) and the mortality
assumptions required under section
302(d)(7)(C), for the plan year in
which the increase otherwise would be
effective,
is at least 75 percent.
``(6) Additional funding requirements for teamster plans.--
``(A) For any plan year beginning on or after
January 1, 2004, and before January 1, 2034, the amount
charged to the funding standard account for the plan
year shall be increased by the amount which, after
taking into account charges and credits under section
302(b), is necessary to increase the funded current
liability percentage at the end of the plan year
(taking into account the expected change in current
liability due to benefits and interest accruing during
the plan year, expected disbursements during the plan
year, and the change in the market value of assets due
to interest and expected disbursements during the plan
year) for the plan year to a percentage equal to the
sum of--
``(i) the funded current liability
percentage at the beginning of the plan year,
and
``(ii) the lesser of 4 percent or the
percentage determined by dividing--
``(I) the excess of 90 percent over
the funded current liability percentage
as of the beginning of the plan year,
by
``(II) 30 minus the number of plan
years completed since the last plan
year beginning before January 1, 2004.
``(B) For any plan year beginning on or after
January 1, 2034, the amount charged to the funding
standard account for the plan year shall be increased
by the amount which, after taking into account charges
and credits under section 302(b), is necessary to
increase the funded current liability percentage at the
end of the plan year (taking into account the expected
change in current liability due to benefits and
interest accruing during the plan year, expected
disbursements during the plan year, and the change in
the market value of assets due to interest and expected
disbursements during the plan year) for the plan year
to the lesser of--
``(i) 90 percent, and
``(ii) the sum of the funded current
liability percentage at the beginning of the
plan year and 4 percent.
``(C) The term `funded current liability
percentage' means, with respect to any employer for any
plan year, the percentage which--
``(i) the lesser of the fair market value
of the assets and the actuarial value of the
assets attributable to the employer for the
plan year, is of
``(ii) the employer's teamster plan current
liability.
``(7) Special rules for small teamster plans.--
``(A) Paragraph (6) shall not apply to any teamster
plan for any plan year if on each day during the
preceding plan year such plan had no more than 100
participants.
``(B) In the case of a teamster plan to which
subparagraph (A) does not apply and which on each day
during the preceding plan year had no more than 150
participants, the amount of the increase under
paragraph (6) for such plan year shall be equal to the
product of--
``(i) such increase determined without
regard to this subparagraph, multiplied by
``(ii) 2 percent for the highest number of
participants in excess of 100 on any such day.
``(C) For purposes of this paragraph, all teamster
plans maintained by the same employer (or any member of
such employer's controlled group) shall be treated as 1
plan, but only employees of such employer or member
shall be taken into account.
``(8) Benefits may not be increased by reason of minimum
required contribution.--A teamster plan may not provide for any
increase in a participant's benefit attributable to an increase
in the minimum contributions determined under this section for
any plan year to the extent such minimum contributions exceed
the negotiated contributions for such plan year.
``(9) Definitions.--For purposes of this section--
``(A) Unfunded past service liability.--The term
`unfunded past service liability' means, with respect
to each employer who, as of the first day of the first
plan year for which this section is effective, has an
obligation to contribute to a teamster plan, the excess
of the employer's teamster plan accrued liability
determined as of such date over the employer's initial
market value of assets.
``(B) Teamster plan accrued liability.--The term
`teamster plan accrued liability' means, with respect
to each employer who has an obligation to contribute to
a teamster plan, the sum of the employer's transition
liability (if any) and the employer's ongoing
liability.
``(C) Transition liability.--The term `transition
liability' means, with respect to each employer who, as
of the first day of the first plan year for which this
section is effective, has an obligation to contribute
to a teamster plan, the product of--
``(i) the sum of
``(I) the accrued liability for the
benefits under the plan (as a whole, as
if such plan were treated as a single
multiemployer plan rather than a
collection of single-employer plans but
taking into account the requirements of
this section) attributable as of the
first day of the first plan year for
which this section is effective to
participants who as of such date are
not employed in credited service for
any employer, and
``(II) the accrued liability for
the benefits under the plan (as a
whole, as if such plan were treated as
a single multiemployer plan rather than
a collection of single-employer plans
but taking into account the
requirements of this section)
attributable as of the first day of the
first plan year which this section is
effective to the credited service of
participants (other than participants
described in (I) with an employer that
does not have an obligation to
contribute to the teamster plan as of
such date, and
``(ii) the percentage determined as of the
first day of the first plan year for which this
section is effective by dividing the sum of the
contributions required to be made under such
plan by the employer for the 5 preceding plan
years by the sum of the contributions required
to be made by all such employers for the 5
preceding plan years.
``(D) Ongoing liability.--The term `ongoing
liability' means, with respect to each employer, the
accrued liability for benefits under a teamster plan
attributable to credited service with the employer for
those participants who are employed in credited service
with any employer at any time on or after the first day
of the first plan year for which this section is
effective.
``(E) Teamster plan current liability.--The term
`teamster plan current liability' means, with respect
to each employer who has an obligation to contribute to
a teamster plan, the sum of the employer's transition
current liability (if any) and the employer's ongoing
current liability.
``(F) Transition current liability.--The term
`transition current liability' means, with respect to
each employer who, as of the first day of the first
plan year for which this section is effective, has an
obligation to contribute to a teamster plan, the
product of--
``(i) the sum of--
``(I) the current liability (as
defined under section 302(d)(7)) for
the benefits under the plan (as a
whole, as if such plan were treated as
a single multiemployer plan rather than
a collection of single-employer plans
but taking into account the
requirements of this section)
attributable, as of the first day of
the first plan year for which this
section is effective, to participants
who as of such date are not employed in
credited service for any employer, and
``(II) the current liability (as
defined under section 302(d)(7)) for
the benefits under the plan (as a
whole, as if such plan were treated as
a single multiemployer plan rather than
a collection of single-employer plans
but taking into account the
requirements of this section)
attributable, as of the first day of
the first plan year for which this
section is effective section, to the
credited service of participants (other
than participants described in (I))
with an employer that does not have an
obligation to contribute to the
teamster plan as of such date, and
``(ii) the percentage determined as of the
first day of the first plan year for which this
section is effective by dividing the sum of the
contributions required to be made under such
plan by the employer for the 5 preceding plan
years by the sum of the contributions required
to be made by all such employers for the 5
preceding plan years.
``(G) Ongoing current liability.--The term `ongoing
current liability' means, with respect to each
employer, the current liability (as defined under
section 302(d)(7)) for benefits under a teamster plan
attributable to credited service with the employer for
those participants who are employed in credited service
with any employer at any time on or after the first day
of the first plan year for which this section is
effective date of this section.
``(H) Employer's initial market value of assets.--
The term `employer's initial market value of assets'
means, with respect to each employer who (as of the
first day of the first plan year for which this section
is effective) has an obligation to contribute to a
teamster plan, the product, determined as of the first
day of the first plan year for which this section is
effective, of the funded percentage for the teamster
plan as of such date and the employer's teamster plan
accrued liability as of such date.
``(I) Funded percentage.--The term `funded
percentage' means, for each teamster plan, the amount
determined by dividing the fair market value of the
assets of the teamster plan (as a whole, as if such
plan were treated as a single multiemployer plan rather
than a collection of single-employer plans but taking
into account the rules of this section), including
receivables, as of the first day of the first plan year
for which this section is effective, by the teamster
plan accrued liability for the plan (as a whole, as if
such plan were treated as a single multiemployer plan
rather than a collection of single-employer plans but
taking into account the rules of this section) as of
such date.
``(J) Anticipation of future benefit increases.--
For purposes of subparagraphs (A), (B), (C), (D), and
(I) in determining accrued liability, the funding
method of a plan shall anticipate benefit increases
scheduled to take effect during the term of the
collective bargaining agreement(s) applicable to the
plan.
``(10) Employer.--
``(A) For purposes of this section, all employees
of all corporations which are members of a controlled
group of corporations (within the meaning of section
1563(a) of the Internal Revenue Code of 1986,
determined without regard to section 1563(a)(4) and
(e)(3)(C) of such Code) shall be treated as employed by
a single employer.
``(B) For purposes of this section, under
regulations prescribed by the Secretary of the
Treasury, all employees of trades or businesses
(whether or not incorporated) which are under common
control shall be treated as employed by a single
employer. The regulations prescribed under this
subparagraph shall be based on principles similar to
the principles which apply in the case of subparagraph
(A).
``(11) Effective date.--
``(A) In general.--This section shall apply to plan
years beginning after December 31, 2003.
``(B) Periods before funding effective date.--
``(i) In general.--Notwithstanding any
contrary provision, prior to the funding
effective date, an employer shall not be
required to make the minimum contributions
determined under this section and shall not be
treated as maintaining a single-employer plan
for purposes of subsections (e) and (f) of
section 302.
``(ii) For purposes of this subparagraph,
the term `funding effective date' means, with
respect to each employer, the earlier of--
``(I) the date on which the last
collective bargaining agreement
ratified before January 1, 2004
terminates (determined without regard
to any extension thereof after January
1, 2004), and
``(II) January 1, 2009.
``(iii) Special rule.--An employer shall
not be treated as having an accumulated funding
deficiency prior to the funding effective date
solely by reason of failing to make the minimum
contributions determined under this section,
provided such employer makes its negotiated
contributions.''.
(2) Clerical amendment.--The table of contents in section 1
of such Act is amended by striking the item relating to
sections 308 and inserting the following new items:
``Sec. 308. Teamster plans.
``Sec. 309. Effective dates.''.
(d) Effective Date.--Except as otherwise provided herein, the
amendments made by this section shall apply to plan years beginning
after December 31, 2003.
SEC. 4. CONFORMING AMENDMENTS TO INTERNAL REVENUE CODE OF 1986.
(a) Teamster Plans Not Multiemployer Plan For Purposes of Security
Requirement.--Section 401(a)(29) of the Internal Revenue Code of 1986
is amended by adding at the end the following new subparagraph:
``(F) Teamster plans.--For purposes of this
paragraph, effective as of the funding effective date
as defined in section 412(o)(10), a teamster plan (as
defined in section 4001(a)(22) of the Employee
Retirement Income Security Act of 1974) shall not be
treated as a multiemployer plan, and each employer that
has an obligation to contribute to a teamster plan shall be treated as
a contributing sponsor maintaining a single-employer plan in accordance
with section 412(o).''.
(b) Rule Relating to Prohibition on Benefit Increases While Sponsor
in Bankruptcy.--Section 401(a)(33) of such Code is amended by
redesignating subparagraph (D) as subparagraph (E) and by inserting
after subparagraph (C) the following new subparagraph:
``(D) Special rule for teamster plans.--For
purposes of this paragraph, a teamster plan (as defined
in section 4001(a)(22) of the Employee Retirement
Income Security Act of 1974) shall not be treated as a
multiemployer plan. This paragraph shall be applied
separately with respect to each employer that has an
obligation to contribute to a teamster plan, and the
funded current liability percentage for purposes of
subparagraph (B) shall be determined in accordance with
section 412(o).''.
(c) Rules Relating to Deductibility of Contributions.--
(1) In general.--Section 404(a)(1) of such Code is amended
by adding at the end thereof the following subparagraph:
``(F) Special rule for teamster plans.--
Notwithstanding any other provision of this subchapter,
in the case of any teamster plan (as defined in section
4001(a)(22) of the Employee Retirement Income Security
Act of 1974), the maximum amount deductible under the
limitations of this paragraph for a plan year by an
employer obligated to make contributions to such plan
for such year shall not be less than the minimum
contribution required by such employer for such year
under section 412(o).''.
(2) Limitation on deductions where combination of defined
contribution plan and defined benefit plan.--Section 404(a)(7)
is amended by inserting after subparagraph (D) the following
new subparagraph:
``(E) Teamster plans.--Subparagraph (A) shall not
apply to that portion of the employer's contribution to
a teamster plan (as defined in section 4001(a)(22) of
the Employee Retirement Income Security Act of 1974) to
the extent such contribution is required as a result of
charges to the funding standard account described in
section 412(o)(2)(B) or 412(o)(7).''.
(d) Special Rules for Teamster Plans.--Section 412 of such Code is
amended by adding at the end the following new subsection:
``(o) Teamster Plans.--
``(1) In general.--For purposes of this section other than
subsection (l), a teamster plan (as defined in section
4001(a)(22) of the Employee Retirement Income Security Act of
1974) shall not be treated as a multiemployer plan, and each
employer that has an obligation to contribute to a teamster
plan shall be treated as a contributing sponsor maintaining a
single-employer plan, subject to the special rules of this
subsection.
``(2) Funding standard account.--A funding standard account
shall be established and maintained for each employer that has
an obligation to contribute to a teamster plan. In determining
the funding standard account under subsection (b) for each such
employer--
``(A) subsections (b)(2)(B)(i) and (b)(2)(B)(ii)
shall not apply;
``(B) in the case of a teamster plan in effect on
the first day of the first plan year for which this
subsection is effective, the funding standard account
shall be charged with--
``(i) the amount necessary to amortize in
equal annual installments (until fully
amortized) the employer's unfunded past service
liability, over a period of 30 plan years, and
``(ii) the amount necessary to amortize
over a period of 10 plan years in equal annual
installments (until fully amortized) the credit
determined under section 412(o)(2)(C)(ii) for
the immediately preceding plan year; and
``(C) in the case of a teamster plan in effect on
the first day of the first plan year for which this
subsection is effective, the funding standard account
shall be credited with--
``(i) the amount necessary to amortize in
equal annual installments (until fully
amortized) the excess (if any) of the
employer's initial market value of assets over
the employer's teamster plan accrued liability
determined as of the first day of the first
plan year for which this subsection
is effective, over a period of 30 plan years; and
``(ii) for an employer who has made its
negotiated contribution for a plan year
beginning after December 31, 2003 and before
the funding effective date, the excess (if any)
of--
``(I) the minimum funding
requirement determined under this
section for such plan year, over
``(II) the actual contribution made
to the plan for any such plan year.
``(3) Valuation of assets.--For purposes of subsection
(c)(2)(A), the actuarial value of assets of a teamster plan as
of the first day of the first plan year for which this
subsection is effective shall be the fair market value of such
assets as of such date. The value of the assets attributable to
each employer shall be adjusted annually according to
principles of master trust accounting for the employer's plan
contributions, investment income (and loss), the employer's
benefit payments with respect to its ongoing liability and
transition liability (if any), and the employer's share of
administrative expenses. Prospective investment experience may
be reflected in accordance with subsection (c)(2) or any
applicable regulations issued by the Secretary.
``(4) Election with respect to bonds.--The special election
described in subsection (c)(2)(B) shall not apply.
``(5) Certain retroactive plan amendments.--Notwithstanding
any other provision of this subsection, a teamster plan shall
be treated as a multiemployer plan for purposes of subsection
(c)(8)(A).
``(6) Benefits may not be increased unless teamster plan is
sufficiently funded.--In addition to the requirements of
subsection (f)(1), no amendment of a teamster plan which
increases the liabilities of the plan with respect to an
employer by reason of any increase in benefits, any change in
the accrual of benefits, or any change in the rate at which
benefits become nonforfeitable under the plan shall be adopted
and no increase in benefits attributable to an existing
provision of a teamster plan (other than an increase that
results solely from an increase in a participant's
compensation, age or service or other similar factor),
including an increase in benefits attributable to an increase
in the negotiated contribution, shall take effect unless at the
time such increase otherwise would be effective--
``(A) the percentage determined by dividing--
``(i) the lesser of the fair market value
of the assets and the actuarial value of the
assets attributable to the employer for the
plan year in which the increase otherwise would
be effective, by
``(ii) the employer's teamster plan current
liability (determined using the highest rate of
interest which is allowable for the plan year
under subsection (l)(7)(C)) for the plan year
in which the increase otherwise would be
effective,
is at least 90 percent, and
``(B) the percentage determined by dividing--
``(i) the amount described in subparagraph
(A)(i), by
``(ii) the sum of--
``(I) the amount described in
subparagraph (A)(ii), and
``(II) the increase in the present
value of future service benefits
(taking into account the amendment or
other circumstance resulting in such
increase), determined using the highest
rate of interest which is allowable for
the plan year under subsection (l)(7)C)
and the mortality assumptions required
under subsection (l)(7)(C), for the
plan year in which the increase
otherwise would be effective,
is at least 75 percent.
``(7) Additional funding requirements for teamster plans.--
``(A) For any plan year beginning on or after
January 1, 2004, and before January 1, 2034, the amount
charged to the funding standard account for the plan
year shall be increased by the amount which, after
taking into account charges and credits under
subsection (b), is necessary to increase the funded
current liability percentage at the end of the plan
year (taking into account the expected change in
current liability due to benefits and interest accruing
during the plan year, expected disbursements during the
plan year, and the change in the market value of assets
due to interest and expected disbursements during the
plan year) for the plan year to a percentage equal to
the sum of--
``(i) the funded current liability
percentage at the beginning of the plan year,
and
``(ii) the lesser of 4 percent or the
percentage determined by dividing--
``(I) the excess of 90 percent over
the funded current liability percentage
as of the beginning of the plan year,
by
``(II) 30 minus the number of plan
years completed since the last plan
year beginning before January 1, 2004.
``(B) For any plan year beginning on or after
January 1, 2034, the amount charged to the funding
standard account for the plan year shall be increased
by the amount which, after taking into account charges
and credits under subsection (b), is necessary to
increase the funded current liability percentage at the
end of the plan year (taking into account the
expected change in current liability due to benefits and interest
accruing during the plan year, expected disbursements during the plan
year, and the change in the market value of assets due to interest and
expected disbursements during the plan year) for the plan year to the
lesser of--
``(i) 90 percent, and
``(ii) the sum of the funded current
liability percentage at the beginning of the
plan year and 4 percent.
``(C) For purposes of this paragraph, the term
`funded current liability percentage' means, with
respect to any plan year, the percentage which--
``(i) the lesser of the fair market value
of the assets and the actuarial value of the
assets attributable to the employer for the
plan year, is of
``(ii) the employer's teamster plan current
liability.
``(8) Special rules for small teamster plans.--
``(A) Paragraph (7) shall not apply to any teamster
plan for any plan year if on each day during the
preceding plan year such plan had no more than 100
participants.
``(B) In the case of a teamster plan to which
subparagraph (A) does not apply and which on each day
during the preceding plan year had no more than 150
participants, the amount of the increase under
paragraph (7) for such plan year shall be equal to the
product of--
``(i) such increase determined without
regard to this subparagraph, multiplied by
``(ii) 2 percent for the highest number of
participants in excess of 100 on any such day.
``(C) For purposes of this paragraph, all teamster
plans maintained by the same employer (or any member of
such employer's controlled group) shall be treated as 1
plan, but only employees of such employer or member
shall be taken into account.
``(9) Benefits may not be increased by reason of minimum
required contribution.--A teamster plan may not provide for any
increase in a participant's benefit attributable to an increase
in the minimum contributions determined under this subsection
for any plan year to the extent such minimum contributions
exceed the negotiated contributions for such plan year.
``(10) Definitions.--For purposes of this subsection--
``(A) Unfunded past service liability.--The term
`unfunded past service liability' means, with respect
to each employer who (as of the first day of the first
plan year for which this subsection is effective) has
an obligation to contribute to a teamster plan, the
excess of the employer's teamster plan accrued
liability as of such date over the employer's initial
market value of assets.
``(B) Teamster plan accrued liability.--The term
`teamster plan accrued liability' means, with respect
to each employer who has an obligation to contribute to
a teamster plan, the sum of the employer's transition
liability (if any) and the employer's ongoing
liability.
``(C) Transition liability.--The term `transition
liability' means, with respect to each employer who, as
of the first day of the first plan year for which this
subsection is effective, has an obligation to
contribute to a teamster plan, the product of--
``(i) the sum of--
``(I) the accrued liability for the
benefits under the plan (as a whole, as
if such plan were treated as a single
multiemployer plan rather than a
collection of single-employer plans but
taking into account the requirements of
this subsection) attributable, as of
the first day of the first plan year
for which this subsection is effective,
to participants who as of such
effective date are not employed in
credited service for any employer, and
``(II) the accrued liability for
the benefits under the plan (as a
whole, as if such plan were treated as
a single multiemployer plan rather than
a collection of single-employer plans
but taking into account the
requirements of this subsection)
attributable as of the first day of the
first plan year for which, this
subsection is effective, to the
credited service of participants (other
than participants described in
subclause (I)) with an employer that
does not have an obligation to
contribute to the teamster plan as of
such date, and
``(ii) the percentage determined as of the
first day of the first plan year for which this
subsection is effective by dividing the sum of
the contributions required to be made under
such plan by the employer for the 5 preceding
plan years by the sum of the contributions
required to be made by all such employers for
the 5 preceding plan years.
``(D) Ongoing liability.--The term `ongoing
liability' means, with respect to each employer, the
accrued liability for benefits under a teamster plan
attributable to credited service with the employer for
those participants who are employed in credited service
with any employer at any time on or after the first day
of the first plan year for which this section is
effective.
``(E) Teamster plan current liability.--The term
`teamster plan current liability' means, with respect
to each employer who has an obligation to contribute to a teamster
plan, the sum of the employer's transition current liability (if any)
and the employer's ongoing current liability.
``(F) Transition current liability.--The term
`transition current liability' means, with respect to
each employer who, as of the first day of the first
plan year for which this subsection is effective, has
an obligation to contribute to a teamster plan the
product of--
``(i) the sum of--
``(I) the current liability (as
defined under subsection (l)(7)) for
the benefits under the plan (as a
whole, as if such plan were treated as
a single multiemployer plan rather than
a collection of single-employer plans
but taking into account the
requirements of this subsection)
attributable as of the first day of the
first plan year for which this
subsection is effective to participants
who as of such effective date are not
employed in credited service for any
employer, and
``(II) the current liability (as
defined under subsection (l)(7)) for
the benefits under the plan (as a
whole, as if such plan were treated as
a single multiemployer plan rather than
a collection of single-employer plans
but taking into account the
requirements of this subsection)
attributable as of the first day of the
first plan year for which this
subsection is effective to the credited
service of participants (other than
participants described in subclause
(I)) with an employer that does not
have an obligation to contribute to the
teamster plan as of such date, and
``(ii) the percentage determined as of the
first day of the first plan year for which this
subsection is effective by dividing the sum of
the contributions required to be made under
such plan by the employer for the 5 preceding
plan years by the sum of the contributions
required to be made by all such employers for
the 5 preceding plan years.
``(G) Ongoing current liability.--The term `ongoing
current liability' means, with respect to each
employer, the current liability (as defined under
subsection (l)(7)) for benefits under a teamster plan
attributable to credited service with the employer for
those participants who are employed in credited service
with any employer at any time on or after the first day
of the first plan year for which this subsection is
effective.
``(H) Employer's initial market value of assets.--
The term `employer's initial market value of assets'
means with respect to each employer who, as of the
first day of the first plan year for which this
subsection is effective, has an obligation to
contribute to a teamster plan, the product determined
as of the first day of the first plan year for which
this subsection is effective of the funded percentage
for the teamster plan as of such date and the
employer's teamster plan accrued liability as of such
date.
``(I) Funded percentage.--The term `funded
percentage' means, for each teamster plan, the amount
determined by dividing--
``(i) the fair market value of the assets
of the teamster plan (as a whole, as if such
plan were treated as a single multiemployer
plan rather than a collection of single-
employer plans but taking into account the
requirements of this subsection) including
receivables, as of the first day of the first
plan year for which this subsection is
effective, by
``(ii) the teamster plan accrued liability
for the plan (as a whole, as if such plan were
treated as a single multiemployer plan rather
than a collection of single-employer plans but
taking into account the requirements of this
subsection), as of such date.
``(J) Anticipation of future benefit increases.--
For purposes of subparagraphs (A), (B), (C), (D), and
(I) in determining accrued liability, the funding
method of a plan shall anticipate benefit increases
scheduled to take effect during the term of the
collective bargaining agreement(s) applicable to the
plan.
``(11) Effective date.--
``(A) In general.--This subsection shall apply to
plan years beginning after December 31, 2003.
``(B) Periods before funding effective date.--
``(i) In general.--Notwithstanding any
contrary provision, prior to the funding
effective date, an employer shall not be
required to make the minimum contributions
determined under this subsection and shall not
be treated as maintaining a single-employer
plan for purposes of subsections (m) and (n).
``(ii) Funding effective date.--For
purposes of this subparagraph, the term
`funding effective date' means, with respect to
each employer, the earlier of--
``(I) the date on which the last
collective bargaining agreement
ratified before January 1, 2004,
terminates (determined without regard
to any extension thereof after January
1, 2004), or
``(II) January 1, 2009.
``(iii) Special rule.--An employer shall
not be treated as having an accumulated funding
deficiency prior to the funding effective date
solely by reason of failing to make the minimum
contributions determined under this subsection,
provided such employer makes its negotiated
contributions.''.
(e) Certain Rules Applicable to Collectively Bargained Plans Not To
Apply to Teamster Plans.--Subsection (b) of section 413 of such Code is
amended by adding at the end the following new paragraph:
``(10) Teamster plans.--Notwithstanding subsection (a), in
the case of a teamster plan within the meaning of section
4001(a)(22) of the Employee Retirement Income Security Act of
1974, paragraphs (5), (6), and (7) shall not apply, and--
``(A) the minimum funding standard provided by
section 412 shall be determined in accordance with
subsection (o) of such section,
``(B) liability for taxes under section 4971 shall
be determined under section 4971(h), and
``(C) each employer that has an obligation to
contribute to a teamster plan shall be treated as
maintaining a single-employer plan in accordance with
section 412(o) for purposes of determining the
applicable limitation provided by section 404(a).''.
(f) Modification of Controlled Group Rules.--Subsections (b) and
(c) of section 414 of such Code are each amended by inserting `412(o),'
after `411,'.
(g) Modification of Rules on Merger and Consolidation of Plans,
Etc.--Section 414(l) of such Code is amended by adding at the end the
following new paragraph:
``(3) Assets of teamster plans.--The assets allocated to an
employer that has an obligation to contribute to a teamster
plan (as defined in section 4001(a)(22) of the Employee
Retirement Income Security Act of 1974) shall not be used to
pay benefits for service of participants with other employers
that have an obligation to contribute to such plan.''.
(h) Teamster Plan Not Treated as Multiemployer Plan Under Special
Rules for Multiemployer Plans.--
(1) In general.--Subpart C of part I of subchapter D of
chapter 1 of such Code is amended by adding at the end the
following new section:
``SEC. 418F. TEAMSTER PLANS.
``For purposes of this subpart, a teamster plan (as defined in
section 4001(a)(22) of the Employee Retirement Income Security Act of
1974) shall not be treated as a multiemployer plan.''.
(2) The table of sections for such subpart C is amended by
adding at the end the following new item:
``Sec. 418F. Teamster plans.''.
(i) Teamster Plan Not Treated as Multiemployer Plan Under Tax on
Failure To Meet Minimum Funding Standards.--Section 4971 of such Code
is amended by redesignating subsection (g) as subsection (h) and by
inserting after subsection (f) the following new subsection:
``(g) Teamster Plans.--For purposes of this section, effective as
of the funding effective date as defined in section 412(o)(10), a
teamster plan (as defined in section 4001(a)(22) of the Employee
Retirement Income Security Act of 1974) shall not be treated as a
multiemployer plan, and each employer that has an obligation to
contribute to a teamster plan shall be treated as maintaining a single-
employer plan in accordance with section 412(o).''.
(j) Effective Date.--Except as otherwise provided herein the
amendments made by this section shall apply to plan years beginning
after December 31, 2003.
SEC. 5. AMENDMENTS TO THE LABOR MANAGEMENT RELATIONS ACT, 1947.
(a) Requirements Relating to Labor Organizations.--Section 8(a)(2)
of the National Labor Relations Act (29 U.S.C. 158(a)(2)) is amended by
striking ``pay;'' and inserting ``pay: Provided further, That an
employer shall not be prohibited, in the case of a trust fund that is
part of a plan to which section 308 of the Employee Retirement Income
Security Act of 1974 or section 412(o) of the Internal Revenue Code of
1986 applies, from making contributions to the plan, otherwise required
under part 3 of subtitle B of title I of such Act or under section 412
of such Code, at the minimum levels required under the applicable
provisions of such sections 308 and 412(o), or from making future
contributions to such plan, otherwise required under such part 3 or
such section 412, at negotiated levels, with respect to each such
future contribution for any period, reduced by the amount by which the
minimum contribution contributed for any prior contribution period
exceeded the negotiated contribution for such period.''.
(b) Requirement to Bargain Collectively.--Section 8(a)(5) of such
Act (29 U.S.C. 158(a)(5)) is amended by striking ``section 9(a).'' and
inserting ``section 9(a): Provided, That an employer shall not be
prohibited, in the case of a trust fund that is part of a plan to which
section 308 of the Employee Retirement Income Security Act of 1974 or
section 412(o) of the Internal Revenue Code of 1986 applies, from
making contributions to the plan, otherwise required under part 3 of
subtitle B of title I of such Act or under section 412 of such Code, at
the minimum levels required under the applicable provisions of such
sections 308 and 412(o), or from making future contributions to such
plan, otherwise required under such part 3 or such section 412, at
negotiated levels, with respect to each such future contribution for
any period, reduced by the amount by which the minimum contribution
contributed for any prior contribution period exceeded the negotiated
contribution for such period.''.
(c) Protections for Amounts Held in Trust.--Section 302(c)(5) of
the Labor Management Relations Act, 1947 (29 U.S.C. 186(c)(5)) is
amended by striking ``annuities;'' and inserting ``annuities:
``Provided further, That an employer shall not be prohibited, in the
case of a trust fund that is part of a plan to which section 308 of the
Employee Retirement Income Security Act of 1974 or section 412(o) of
the Internal Revenue Code of 1986 applies, from making contributions to
the plan, otherwise required under part 3 of subtitle B of title I of
such Act or under section 412 of such Code, at the minimum levels
required under the applicable provisions of such sections 308 and
412(o), or from making future contributions to such plan, otherwise
required under such part 3 or such section 412, at negotiated levels,
with respect to each such future contribution for any period, reduced
by the amount by which the minimum contribution contributed for any
prior contribution period exceeded the negotiated contribution for such
period;''.
(d) Effective Date.--The amendments made by this section shall take
effect January 1, 2004.
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