,,ii #aaith ,,congress #ast ,session ,s4 #bjjc ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,june #aj1 #bjbe ,mr4 ,scott of ,south ,carolina 7for himself1 ,mr4 ,cassidy1 ,mr4 ,tillis1 and ,mr4 ,marshall7 introduced the following bill2 which was read twice and referred to the ,committee on ,finance ,a ,,bill ,to amend the ,internal ,revenue ,code of #aihf to permit certain excess plan assets to be used for benefits for active employees1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,strengthening ,benefit ,plans ,act of #bjbe4 ,i ,supporting active employees with current benefit plan expenses #aja4 ,transfer of excess health assets for funding active employee benefits 7a7 ,in general ,section #dbj of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new subsection3 7h7 ,transfer of excess health assets for funding active employee benefits 7#a7 ,in general ,in the case of a pension plan with excess health assets for a fiscal year-- 7,a7 an amount equal to such excess health assets may be transferred in accordance with paragraph 7#c7 from a health benefits account established under section #dja7;h71 7,b7 a trust which is part of such plan shall not be treated as failing to meet the requirements of subsection 7a7 or 7h7 of section #dja solely by reason of such transfer 7or any other action authorized under this subsection71 7,c7 no amount shall be includible in the gross income of the employer maintaining the plan solely by reason of such transfer1 7,d7 such transfer shall not be treated-- 7i7 as an employer reversion for purposes of section #dihj1 or 7ii7 as a prohibited transaction for purposes of section #dige1 and 7,e7 the limitations of paragraph 7#d7 shall apply to the employer4 7#b7 ,excess health assets ,for purposes of this subsection-- 7,a7 ,in general ,the term excess health assets means the amount by which the applicable assets with respect to a retiree health plan exceed an amount equal to #abe percent of the total liability of the employer for benefits for all participants under the retiree health plan1 determined in accordance with applicable accounting standards4 7,b7 ,limitation ,in determining excess health assets1 there shall not be taken into account-- 7i7 amounts attributable to contributions 7other than transfers under any other subsection of this section1 or contributions made pursuant to a legally binding commitment entered into before ,january #a1 #bjbd7 made after ,december #ca1 #bjbc1 to any health benefits account established under section #dja7;h7 with respect to the retiree health plan1 or 7ii7 any reduction in the liability of the employer described in subparagraph 7,a7 due to a reduction in benefits pursuant to an amendment to the retiree health plan adopted after ,december #ca1 #bjbc4 7,c7 ,terminating plans ,in the case of a terminating pension plan which includes a health benefits account under section #dja7;h71 all assets in such health benefits account shall be treated as excess health assets4 7,d7 ,applicable assets ,for purposes of subparagraph 7,a71 the term applicable assets means all assets with respect to a retiree health benefits plan of an employer-- 7i7 in a health benefits account established under section #dja7;h71 or 7ii7 held by a voluntary employees' beneficiary association 7as defined in section #eja7;c77#i774 7#c7 ,transfers permitted 7,a7 ,in general ,a transfer under this paragraph is a transfer-- 7i7 of excess health assets1 in the fiscal year immediately succeeding the fiscal year with respect to which such excess health assets are determined-- 7,i7 to the pension plan under which a health benefits account pursuant to section #dja7;h7 was established1 or 7,,ii7 as provided in subparagraph 7,b77ii71 to a voluntary employees' beneficiary association 7as defined in section #eja7;c77#i771 7ii7 which does not contravene any other provision of law1 7iii7 with respect to which the use requirements of subparagraphs 7,b7 and 7,c7 and the minimum cost and benefit requirements of paragraph 7#d77;,b7 are met1 and 7iv7 with respect to which the vesting requirements of subsection 7c77#b7 are met 7determined by treating such transfer as a qualified transfer74 7,b7 ,use for active benefits 7i7 ,in general ,except as provided in clause 7ii71 a transfer of excess health assets for purposes of this subsection shall be used only to fund the pension plan4 7ii7 ,transfer to voluntary employees' beneficiary association ,a transfer described in subparagraph 7,a77i77,,ii7 may be made only-- 7,i7 in the case of a defined benefit plan1 to the extent a transfer to such plan as provided in subparagraph 7,a77i77,i7 would cause the plan to have a funding excess or increase the funding excess of the plan or1 if the transfer is made in connection with the termination of the defined benefit plan1 to the extent a transfer to such plan would exceed the amount necessary to satisfy the pension liabilities of the terminating plan1 or 7,,ii7 in the case of a pension plan which is not a defined benefit plan4 ,any transfer under the preceding sentence to a voluntary employees' benefit association 7as defined in section #eja7;c77#i77 shall be used only to pay any benefits permitted to be paid by such association to any members of such association 7other than key employees not taken into account under subsection 7e77#a77;,e774 7iii7 ,funding excess ,for purposes of clause 7ii71 the term funding excess with respect to a plan year means the excess1 if any1 of-- 7,i7 the fair market value of the assets of the defined benefit plan 7other than applicable assets1 as defined in paragraph 7#b77;,d771 over 7,,ii7 #aaj percent of the present value of all pension benefits earned or accrued under the plan1 as determined for purposes of determining the adjusted funding target attainment percentage pursuant to section #dcf7;j74 7,c7 ,only #a transfer per year ,no more than #a transfer with respect to any plan may be made under subparagraph 7,a7 during a taxable year4 ,for purposes of the preceding sentence1 any transfer portions of which are described in both subclauses 7,i7 and 7,,ii7 of subparagraph 7,a77i7 shall be treated as #a transfer4 7#d7 ,limitations on employer 7,a7 ,deduction limitations ,for purposes of this title1 no deduction shall be allowed-- 7i7 for the transfer of any amount under paragraph 7#c77;,a71 7ii7 for benefits paid out of the assets 7and income7 so transferred1 or 7iii7 for any amounts to which clause 7ii7 does not apply and which are paid for benefits described in paragraph 7#c77;,b77ii7 for the taxable year to the extent such amounts are not greater than the excess 7if any7 of-- 7,i7 the amount determined under clause 7i7 7and income allocable thereto71 over 7,,ii7 the amount determined under clause 7ii74 7,b7 ,minimum cost and benefit requirements ,each plan or arrangement under which benefits funded as described in paragraph 7#c77;,b77ii7 are provided shall provide that-- 7i7 the applicable employer cost for each of the #e taxable years beginning with the year of the transfer under paragraph 7#c77;,a7 shall not be materially less than the higher of the applicable employer costs for the year of the #b taxable years immediately preceding the taxable year of such transfer1 or 7ii7 benefits provided under the plan or arrangement shall not be materially reduced during the #e year period described in clause 7i74 ,for purposes of clause 7i71 the term applicable employer cost shall be determined under rules similar to the rules of subparagraphs 7,b7 and 7,c7 of subsection 7c77#c71 as applicable to the benefit being provided under such plan or arrangement4 7#e7 ,coordination with sections #dcj and #dcc ,in the case of any assets transferred to a pension plan pursuant to paragraph 7#c71 such assets shall1 for purposes of this section and sections #dcj and #dcc1 be treated as assets in the plan4 4 7b7 ,conforming amendments 7#a7 ,subsection 7h7 of section #dja of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following3 ,nothing in this subsection or this section shall prevent a plan from transferring amounts from an account established under this subsection pursuant to the provisions of section #dbj7;h744 7#b7 ,subparagraph 7,b7 of section #dbj7;c77#a7 of such ,code is amended by adding at the end the following new clause3 7iii7 ,coordination with transfers of excess health assets ,clauses 7i7 and 7ii7 shall not apply to the amount of any excess health assets transferred from a health benefits account to the plan pursuant to subsection 7h77#c77;,a74 4 7#c7 ,subsection 7e7 of section #dbj of such ,code is amended by adding at the end the following new paragraph3 7#h7 ,coordination with transfers of excess health assets 7,a7 ,in general ,a qualified transfer or portion thereof shall not be subject to the limitations of subsections 7b77#c71 7c77#a71 7f77#b77;,c71 or 7f77#b77;,e7 to the extent an amount equal to such transfer 7or portion7 is transferred during the same taxable year under subsection 7h74 7,b7 ,minimum cost and benefit requirements ,the requirements of subsection 7h77#d77;,b7 shall apply in lieu of subsections 7c77#c7 and 7f77#b77;,d7 in the case of a transfer or portion thereof to which subparagraph 7,a7 applies4 4 7#d7 ,subsection 7l7 of section #dcj of such ,code is amended by adding at the end the following3 ,notwithstanding the preceding sentence1 any assets transferred to the plan pursuant to section #dbj7;h7 shall be treated as assets in the plan44 7#e7 ,section #d of the ,employee ,retirement ,income ,security ,act of #aigd 7#bi ,u4,s4,c4 #ajjc7 is amended by adding at the end the following new subsection3 7d7 ,transfers of excess health assets ,a pension plan shall not be treated as failing to meet the requirements of this subchapter solely by reason of any transfer made as permitted by section #dbj7;h7 of the ,internal ,revenue ,code of #aihf4 4 7#f7 ,section #cjc7l7 of the ,employee ,retirement ,income ,security ,act of #aigd 7#bi ,u4,s4,c4 #ajhc7l77 is amended by adding at the end the following3 ,notwithstanding the preceding sentence1 any assets transferred to the plan pursuant to section #dbj7;h7 of such ,code shall be treated as assets in the plan44 7#g7 ,section #djh7;b77#ac7 of such ,act 7#bi ,u4,s4,c4 #aajh7;b77#ac77 is amended by striking the period at the end and inserting 1 or any transfer of excess health assets permitted under section #dbj7;h7 of such ,code 7as in effect on the date of the enactment of the ,strengthening ,benefit ,plans ,act of #bjbe744 7c7 ,notice requirements ,section #aja7;e7 of the ,employee ,retirement ,income ,security ,act of #aigd 7#bi ,u4,s4,c4 #ajba7;e77 is amended by adding at the end the following new paragraph3 7#d7 ,transfers of excess health assets 7,a7 ,notice to participants ,not later than #fj days before the date of a transfer by an employee pension benefit plan of excess health assets pursuant to section #dbj7;h77#a7 of the ,internal ,revenue ,code of #aihf1 the administrator of the plan shall provide notice 7in such manner as the ,secretary may prescribe7 of such transfer to each participant and beneficiary eligible to receive benefits paid from the health benefits account under section #dja7;h7 of such ,code from which the transfer is to be made4 ,such notice shall include information with respect to the amount of excess health assets to be transferred1 the plan or voluntary employees' beneficiary association to which the transfer is to be made1 and the amount of pension benefits of the participant which will be nonforfeitable immediately after the transfer4 7,b7 ,notice to ,secretaries1 etc ,rules similar to the rules of paragraph 7#b7 shall apply for purposes of this paragraph4 4 7d7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after ,december #ca1 #bjbd4 ,,ii ,supporting active employees with retirement contributions #bja4 ,transfer of surplus defined benefit plan assets to defined contribution plan 7a7 ,in general ,section #dja of the ,internal ,revenue ,code of #aihf is amended by redesignating subsection 7p7 as subsection 7q7 and by inserting after subsection 7o7 the following new subsection3 7p7 ,transfer of surplus defined benefit plan assets to defined contribution plan 7#a7 ,in general 7,a7 ,transfer permitted ,if an employer maintaining a defined benefit plan establishes or maintains a defined contribution plan which would be a qualified replacement plan 7as defined in section #dihj7;d77#b77 with respect to the defined benefit plan but for the fact that the defined benefit plan is not terminated1 subject to the requirements of paragraphs 7#c7 and 7#d71 any surplus assets of the defined benefit plan may be transferred to the defined contribution plan4 7,b7 ,treatment of amount transferred ,in the case of the transfer of any amount under subparagraph 7,a7-- 7i7 such amount shall not be includible in the gross income of the employer1 7ii7 no deduction shall be allowable with respect to such transfer1 and 7iii7 such transfer shall not be treated as an employer reversion for purposes of section #dihj4 7#b7 ,surplus assets ,for purposes of this subsection1 the term surplus assets means the excess of assets of the defined benefit plan over an amount equal to #aaj percent of the value of plan liabilities used to determine premiums imposed under title ,,iv of the ,employee ,retirement ,income ,security ,act of #aigd for the plan year of the transfer4 7#c7 ,vesting of benefits ,the requirements of this paragraph are met if all benefits under the defined benefit plan become nonforfeitable in the same manner which would be required if the plan had terminated immediately before the transfer 7or in the case of a participant who separated during the #a-year period ending on the date of the transfer1 immediately before such separation74 7#d7 ,no reduction in benefits ,the requirements of this paragraph are met if1 during the period beginning with the year of the transfer and ending #d plan years after the last plan year during which the replacement plan is funded by the transfer1 no benefits under the replacement plan are reduced4 4 7b7 ,conforming amendments 7#a7 ,section #d of the ,employee ,retirement ,income ,security ,act of #aigd 7#bi ,u4,s4,c4 #ajjc71 as amended by section #aja1 is further amended by adding at the end the following new subsection3 7e7 ,transfers of surplus defined benefit plan assets ,a pension plan shall not be treated as failing to meet the requirements of this subchapter solely by reason of any transfer made as permitted by section #dja7p7 of the ,internal ,revenue ,code of #aihf4 4 7#b7 ,section #djh7;b77#ac7 of such ,act 7#bi ,u4,s4,c4 #aajh7;b77#ac771 as amended by section #aja1 is further amended by inserting or of surplus defined benefit plan assets permitted under section #dja7p7 of such ,code 7as so in effect7 before the period at the end4 7c7 ,notice requirements ,section #aja7;e7 of the ,employee ,retirement ,income ,security ,act of #aigd 7#bi ,u4,s4,c4 #ajba7;e771 as amended by section #aja1 is further amended by adding at the end the following new paragraph3 7#e7 ,transfers of surplus defined benefit plan assets ,rules similar to the rules of paragraph 7#d7 shall apply in the case of any transfer by an employee pension benefit plan of surplus defined benefit plan assets pursuant to section #dja7p7 of the ,internal ,revenue ,code of #aihf4 4 7d7 ,effective date ,the amendments made by this section shall apply to plan years beginning after ,december #ca1 #bjbe4