S. 4121Senate109th Congress (2005-2007)Passed Senate

A bill to provide optional funding rules for employers in applicable multiple employer pension plans.

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December 8, 2006

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SenateIntro Referral

Introduced in Senate

December 8, 2006

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Introduced in the Senate, read twice, considered, read the third time, and passed without amendment by Voice Vote. (consideration: CR S11643-11644; text as passed Senate: CR S11643-11644)

December 8, 2006

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Received in the House.

December 8, 2006 • 11:39 PM

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Held at the desk.

December 8, 2006 • 11:40 PM

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Message on Senate action sent to the House.

December 8, 2006

Floor Debate

4 members

What members said about S. 4121 on the floor

3 Republicans1 Democrat

Sen. Ted StevensR-AK · Dec 8, 2006

I send a bill to the desk and ask unanimous consent for its immediate consideration. Mr. President, a year ago I raised the issue of the problem of the small timber industry in Alaska, and we had an…

I send a bill to the desk and ask unanimous consent for its immediate consideration.

Mr. President, a year ago I raised the issue of the problem of the small timber industry in Alaska, and we had an amendment to be offered to the tax bill. I was asked not to proceed then, and I received a commitment that this amendment would be included in the next tax bill as a technical correction. We thought it was going to be in this year again, and I discovered it is not in the bill.

What this bill does, it deals with the problem created in the timber industry in southeastern Alaska when a series of companies failed and they left a situation where the pension plan is supported only by the surviving companies. These companies have the obligation to pay the pensions of those who retired from other companies that failed, prior to their demise, but they found they cannot do that and survive unless the time within which the payments are to be made is extended. That will be the purpose of this bill. The purpose of this bill is to extend the time so that the surviving companies can pay not only their own employer contribution for their own employees but for the employees of the companies that failed.

I have been told today that this bill affects 600 to 1,000 jobs in southeastern Alaska now and up to 2,000 employees who already retired. Unless the time is extended, the surviving companies will fail and the existing employees will lose their jobs and those who have already retired will not get their pensions.

I conferred with our friend, the chairman on the House side, Chairman Thomas. I suggested the only way to deal with this now, since the House has already passed this bill without the amendment in it, would be to have this independent bill passed. I am grateful to all who have been considering this bill all day long. It has been an all-day-long proposition, and I do hope it will be passed now so that we may try to see if the House can pass it before they adjourn.

I do urge immediate passage of the bill.

I move to lay that motion on the table.

The motion to lay on the table was agreed to.

Sen. Harry ReidD-NV · Dec 8, 2006

I move to reconsider the bill. Mr. President, I ask unanimous consent that the order for the quorum call be dispensed with. Mr. President, for 16 years I have had a woman working for me who has been…

I move to reconsider the bill.

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

Mr. President, for 16 years I have had a woman working for me who has been outstanding. She has worked in my press department for the last 8 years. She has been my chief of staff. Her name is Susan McCue. She has a wonderful background. She is one of 10 children. She put herself through college working as a waitress, among other things. She is a graduate of Rutgers University with a bachelor's degree.

Some people are born with the ability to jump high and throw balls a long ways, and some people go to the finest business schools in the country to learn how to manage people. Susan has an innate ability, as if she were a skilled athlete, a skill to be an administrator. What she did to develop my staff is something that I am sure someday will be used as a ``how you should hire a staff in Washington, DC.''

I have such great affection for Susan. She has worked so hard for me. She has decided to leave after 16 years to go downtown and work, seeking not a job where she can make a lot of money but working in a program that will deal with poor people around the world. She will make just a little bit more money than she is being paid right here. But being the person she is, a kind, thoughtful, considerate person, she thought it was time for a change.

As hard as it is for me to let someone go who has done such a wonderful job for me, I must be as loyal and dedicated to her as she has been to me.

I want everyone to know--and I especially want Susan to know--that her work on my behalf has been something that I and my family will long remember. I have never had anyone in my professional career as a lawyer, as a government worker, who has been more dedicated or more skilled than Susan McCue. I will miss her greatly. I know our paths will cross, but I am a better person for having had her run my office. And poor people of the world will be well served with Susan McCue looking after them.

I suggest the absence of a quorum.

Sen. Mike DeWineR-OH · Dec 8, 2006

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

Sen. Chuck GrassleyR-IA · Dec 8, 2006

I suggest the absence of a quorum.

Bill Text

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Considered and Passed SenateIssued December 8, 2006

109th CONGRESS

2d Session

S. 4121

IN THE SENATE OF THE UNITED STATES

December 8, 2006

Mr. Stevens introduced the following bill; which was read twice, considered, read the third time, and passed

A BILL

To provide optional funding rules for employers in applicable multiple employer pension plans.

Treatment of liability for certain multiple employer plans

(a)

In general

In the case of an applicable pension plan—

(1)

if an eligible employer elects the application of subsection (b), any liability of the employer with respect to the applicable pension plan shall be determined under subsection (b), and

(2)

if an eligible employer does not make such election, any liability of the employer with respect to the applicable pension plan shall be determined under subsection (c).

(b)

Election to spin off liability

(1)

In general

If an eligible employer elects, within 180 days after the date of the enactment of this Act, to have this subsection apply, the applicable pension plan shall be treated as having, effective January 1, 2006, spun off such employer's allocable portion of the plan's assets and liabilities to an eligible spunoff plan and the employer's liability with respect to the applicable pension plan shall be determined by reference to the eligible spunoff plan in the manner provided under paragraph (2). The employer's liability, as so determined, shall be in lieu of any other liability to the Pension Benefit Guaranty Corporation or to the applicable pension plan with respect to the applicable pension plan.

(2)

Liability of employers electing spinoff

(A)

Ongoing funding liability

(i)

In general

In the case of an eligible spunoff plan, the amendments made by section 401, and subtitles A and B of title I, of the Pension Protection Act of 2006 shall not apply to plan years beginning before the first plan year for which the plan ceases to be an eligible spunoff plan (or, if earlier, January 1, 2017), and except as provided in clause (ii), the employer maintaining such plan shall be liable for ongoing contributions to the eligible spunoff plan on the same terms and subject to the same conditions as under the provisions of the Employee Retirement Income Security Act of 1974 and the Internal Revenue Code of 1986 as in effect before such amendments. Such liability shall be in lieu of any other liability to the Pension Benefit Guaranty Corporation or to the applicable pension plan with respect to the applicable pension plan.

(ii)

Interest Rate

In applying section 302(b)(5)(B) of the Employee Retirement Income Security Act of 1974 and section 412(b)(5)(B) of the Internal Revenue Code of 1986 (as in effect before the amendments made by subtitles A and B of title I of the Pension Protection Act of 2006) and in applying section 4006(a)(3)(E)(iii) of such Act (as in effect before the amendments made by section 401 of such Act) to an eligible spunoff plan for plan years beginning after December 31, 2007, and before the first plan year to which such amendments apply, the third segment rate determined under section 303(h)(2)(C)(iii) of such Act and section 430(h)(2)(C)(iii) of such Code (as added by such amendments) shall be used in lieu of the interest rate otherwise used.

(B)

Termination liability

If an eligible spunoff plan terminates under title IV of the Employee Retirement Income Security Act of 1974 on or before December 31, 2010, the liability of the employer maintaining such plan resulting from such termination under section 4062 of the Employee Retirement Income Security Act of 1974 shall be determined in accordance with the assumptions and methods described in subsection (c)(2)(A). The employer's liability, as so determined, shall be in lien of any other liability to the Pension Benefit Guaranty Corporation or to the applicable pension plan with respect to the applicable pension plan.

(c)

Liability of employers not electing spinoff

(1)

In general

If an applicable pension plan is terminated under the Employee Retirement Income Security Act of 1974, an eligible employer which does not make the election described in subsection (b) shall be liable to the corporation with respect to the applicable pension plan (in lieu of any other liability to the Pension Benefit Guaranty Corporation or to the applicable pension plan with respect to the applicable pension plan ) in an amount equal to the fractional portion of the adjusted unfunded benefit liabilities of such plan as of December 31, 2005, determined without regard to any adjusted unfunded benefit liabilities to be transferred to an eligible spunoff plan pursuant to subsection (b).

(2)

Definitions

For purposes of this subsection—

(A)

Adjusted unfunded benefit liabilities

The term adjusted unfunded benefit liabilities means the amount of unfunded benefit liabilities (as defined in section 4001(a)(18) of the Employee Retirement Income Security Act of 1974), except that the interest assumption shall be the rate of interest under section 302(b) of the Employee Retirement Income Security Act of 1974 and section 412(b) of the Internal Revenue Code of 1986, as in effect before the amendments made by the Pension Protection Act of 2006, for the most recent plan year for which such rate exists.

(B)

Fractional portion

The term fractional portion means a fraction, the numerator of which is the amount required to be contributed to the applicable pension plan for the 5 plan years ending before December 31, 2005, by such employer, and the denominator of which is the amount required to be contributed to such plan for such plan years by all employers which do not make the election described in subsection (b).

(d)

Other definitions

For purposes of this section—

(1)

Applicable pension plan

The term applicable pension plan means a single employer plan which—

(A)

was established in the State of Alaska on March 18, 1967, and

(B)

as of January 1, 2005, had 2 or more contributing sponsors at least 2 of which were not under common control.

(2)

Allocable portion

The term allocable portion means, with respect to any eligible employer making an election under subsection (b), the portion of an applicable pension plan’s liabilities and assets which bears the same ratio to all such liabilities and assets as such employer's share (determined under subsection (c) as if no eligible employer made an election under subsection (b)) of the excess (if any) of—

(A)

the liabilities of the plan, valued in accordance with subsection (c), over

(B)

the assets of the plan,

bears to the total amount of such excess.

(3)

Eligible employer

An eligible employer is an employer which participated in an eligible multiple employer plan on or after January 1, 2000.