S. 607

A bill to amend the Employee Retirement Income Security Act of 1974 and the Internal Revenue Code of 1986 with respect to early retirement benefits, and for other purposes.

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II

109th CONGRESS

1st Session

S. 607

IN THE SENATE OF THE UNITED STATES

March 11, 2005

Mr. Harkin 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 and the Internal Revenue Code of 1986 with respect to early retirement benefits, and for other purposes.

1.

Protection of subsidized early retirement benefits in corporate mergers and acquisitions

(a)

Amendment to ERISA

Section 208 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1058) is amended by—

(1)

striking A pension plan and inserting (a) In general.—A pension plan; and

(2)

adding at the end the following:

(b)

Protection of pro-Rata share of early retirement subsidy

If—

(1)

an employee, following the sale of a corporation or a corporate division, liquidation, merger, consolidation, or other similar transaction, continues employment in the same trade or business with the employer that acquires the trade or business in such transaction (referred to in this subsection as the successor employer), and

(2)

the successor employer does not continue to maintain any pension plan in which the employee was a participant before such transaction,

then, solely for the purpose of determining eligibility for any subsidized early retirement benefit provided by such plan, there shall be taken into account any periods of service with the successor employer that would have been taken into account had such transaction not occurred.

.

(b)

Amendment to the Internal Revenue Code

Section 414(l) of the Internal Revenue Code of 1986 (relating to mergers and consolidations of plans) is amended by adding at the end the following:

(3)

Protection of pro-rata share of early retirement subsidy

If—

(A)

an employee, following the sale of a corporation or a corporate division, liquidation, merger, consolidation, or other similar transaction, continues employment in the same trade or business with the employer that acquires the trade or business in such transaction (referred to in this paragraph as the successor employer), and

(B)

the successor employer does not continue to maintain any pension plan in which the employee was a participant before such transaction,

then, solely for the purpose of determining eligibility for any subsidized early retirement benefit provided by such plan, there shall be taken into account any periods of service with the successor employer that would have been taken into account had such transaction not occurred.

.