S. 589 - Chris Allen Multiemployer Pension Recapitalization and Reform Act of 2021

117TH CONGRESS
1ST SESSION

S. ___

To amend the Internal Revenue Code of 1986 and the Employee Retirement Income Security Act of 1974 to reform the treatment of multiemployer plans, to ensure the ability of the Pension Benefit Guaranty Corporation to provide guaranteed benefits of retirees, and for other purposes.

IN THE SENATE OF THE UNITED STATES

_____ introduced the following bill; which was read twice and referred to the Committee on _____

A BILL

To amend the Internal Revenue Code of 1986 and the Employee Retirement Income Security Act of 1974 to reform the treatment of multiemployer plans, to ensure the ability of the Pension Benefit Guaranty Corporation to provide guaranteed benefits of retirees, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) SHORT TITLE. — This Act may be cited as the "Chris Allen Multiemployer Pension Recapitalization and Reform Act of 2021".

(b) TABLE OF CONTENTS. — The table of contents for this Act is as follows:

Sec. 1. Short title; table of contents.

TITLE I — RESTRUCTURING PENSION INSURANCE FOR MULTIEMPLOYER DEFINED BENEFIT PENSION PLANS

Subtitle A — Special Partitions of Eligible Multiemployer Plans

Sec. 101. Special partitions of eligible multiemployer plans.

Subtitle B — PBGC Reforms

Sec. 111. Guarantee rate increase for plans receiving financial assistance.

Sec. 112. Amendment to definition of insolvency.

Sec. 113. Termination of multiemployer plans.

Sec. 114. Benefits under certain terminated plans.

Subtitle C — Pension Insurance Modeling

Sec. 121. Pension insurance modeling.

TITLE II — FUNDING RULES, WITHDRAWAL LIABILITY, AND OTHER REFORMS

Subtitle A — Minimum Funding Standard for Multiemployer Plans

Sec. 201. Valuation of plan liabilities.

Subtitle B — Additional Funding Rules for Multiemployer Plans

PART I — PLAN STATUS AMENDMENTS

Sec. 211. Amendments to Internal Revenue Code of 1986.

Sec. 212. Amendments to Employee Retirement Income Security Act of 1974.

Sec. 213. Transition rules.

PART II — PROVISIONS RELATING TO PLAN MERGERS

Sec. 221. Provisions relating to plan mergers and consolidations.

Sec. 222. Clarification of PBGC financial assistance for plan mergers and partitions.

Sec. 223. Restoration not required for certain mergers.

PART III — WITHDRAWAL LIABILITY REFORM

Sec. 231. Withdrawal liability reform.

TITLE III — PLAN GOVERNANCE, DISCLOSURE, AND OTHER REFORMS FOR MULTIEMPLOYER DEFINED BENEFIT PENSION PLANS

Subtitle A — Plan Governance and Operations for Multiemployer Plans

Sec. 301. Independent trustees.

Sec. 302. Investigatory authority.

Sec. 303. Conditions on financial assistance.

Sec. 304. Excise tax on excess compensation of covered employees of partitioned multiemployer plans.

Subtitle B — Reportable Events for Multiemployer Plans

Sec. 311. Reportable events.

Subtitle C — Funding Notices to Participants in Multiemployer Plans

Sec. 321. Improved multiemployer plan disclosure.

Sec. 322. Penalties for failure to provide notices.

Subtitle D — Consistency of Criminal Penalties

Sec. 331. Consistency of criminal penalties.

TITLE IV — OTHER MULTIEMPLOYER PLAN REFORMS

Sec. 401. Clarification of fiduciary duty of retiree representative who is a trustee.

Sec. 402. Safe harbors.

Sec. 403. Clarification of notice and comment process.

Sec. 404. Protection of participants receiving disability benefits.

Sec. 405. Model notice.

TITLE V — ALTERNATIVE PLAN STRUCTURES

Sec. 501. Composite plans.

Sec. 502. Application of certain requirements to composite plans.

Sec. 503. Treatment of composite plans under title IV.

Sec. 504. Conforming changes.

Sec. 505. Effective date.

TITLE VI — FINANCIAL PROVISIONS

Sec. 601. Additional premiums.

Sec. 602. Funding.

Sec. 603. Composite plan transition fee.

TITLE I — RESTRUCTURING PENSION INSURANCE FOR MULTIEMPLOYER DEFINED BENEFIT PENSION PLANS

Subtitle A — Special Partitions of Eligible Multiemployer Plans

SEC. 101. SPECIAL PARTITIONS OF ELIGIBLE MULTIEMPLOYER PLANS.

(a) IN GENERAL. — Title IV of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1301 et seq.) is amended by inserting after section 4233 the following:

"SEC. 4233A. SPECIAL PARTITIONS OF ELIGIBLE MULTIEMPLOYER PLANS.

"(a) IN GENERAL. —

"(1) REQUIREMENT TO ORDER PARTITION. — Upon the application by the plan sponsor of an eligible multiemployer plan described in subsection (b) for a partition of the plan, the corporation shall order a partition of the plan in accordance with this section, provided the other requirements in this section are met. The corporation shall make a determination regarding the application not later than 150 days after the date such application was filed (or, if later, the date such application was completed) in accordance with regulations that shall be issued by the corporation under subsection (h).

"(2) NOTIFICATION OF PARTICIPANTS. — Not later than 30 days after submitting an application for partition of a plan under paragraph (1), the plan sponsor of the plan shall notify the participants and beneficiaries of such application, in the form and manner prescribed by the corporation.

"(3) IMPLEMENTATION OF TRANSFER. — The corporation shall implement the partition order issued under this section not later than 60 days after the completion of the corporation's determination under paragraph (1).

"(4) FILING DATE OF APPLICATION. — Partitions under this section shall apply only with respect to any eligible multiemployer plan whose plan sponsor files an application that is determined by the corporation to be complete pursuant to regulations issued by the corporation under subsection (h)(1) and that is filed by the later of the time specified in such regulations or 1 year after the corporation issues such regulations.

"(b) ELIGIBLE MULTIEMPLOYER PLAN. — For purposes of this section —

"(1) IN GENERAL. — The term 'eligible multiemployer plan' means a multiemployer plan that meets any of the following conditions:

"(A) The plan became insolvent (as described in section 4245(b), as in effect the day before the date of enactment of this section) on or after December 16, 2014, and prior to the date of enactment of this section and has not terminated.

"(B) The plan —

"(i)(I) was certified, in the most recent annual certification filed pursuant to section 305(b)(3) (as in effect on the day before the date of enactment of this section) before the date of enactment of this section, to be in critical and declining status (as defined in section 305(b)(6), as so in effect), and has not terminated as of such date;

"(II) implemented a suspension of benefits under section 305(e)(9) (as in effect on the day before the date of enactment of this section) prior to the date of enactment of this section;

"(III)(aa) was certified, in the most recent annual certification filed pursuant to section 305(b)(3) (as so in effect) before the date of enactment of this section, to be in critical status (as defined in section 305(b)(2), as so in effect), and has not terminated as of such date;

"(bb) has a funded percentage that is less than 40 percent on a current liability basis, based on the most recent Form 5500, Schedule MB, line 1b(1) for current value of assets and line 1d(2)(a) for current liability, filed before the date of enactment of this section; and

"(cc) has an active to inactive participant ratio that is below 40 percent as of the most recent Form 5500 filed before the date of enactment of this section; or

"(IV)(aa) was certified, in the most recent annual certification filed pursuant to section 305(b)(3) (as so in effect) before the date of enactment of this section, to be in critical status (as defined in section 305(b)(2), as so in effect) and has not terminated before such date,

"(bb) has an active to total participant ratio that is below 20 percent as of the most recent Form 5500 filed before the date of enactment of the section; and

"(cc) has more than 100,000 participants as of the most recent Form 5500 filed before the date of enactment of the section; and

"(ii) is not the plan described in section 9701(a)(3) of the Internal Revenue Code of 1986, determined without regard to the limitation on participation to individuals who retired in 1976 and thereafter.

"(2) ELIGIBLE PLANS REQUIRED TO FILE FOR PARTITION. —

"(A) IN GENERAL. — An eligible multiemployer plan (other than a plan eligible under paragraph (1)(B)(i)(II)) shall file with the corporation for partition under this section. If an eligible plan required under the preceding sentence to file for partition does not so file in a timely manner, the plan is subject to termination under section 4042.

"(B) EXCEPTION. — If a plan is reasonably determined to be ineligible for future adjustments under subsection (j)(3)(C)(iii) —

"(i) subparagraph (A) shall not apply to such plan, and

"(ii) such plan may withdraw the partition application (or, as provided by the corporation in regulations, not submit such application at all).

"(c) CONDITIONS FOR PARTITION. —

"(1) RATE OF ACCRUALS. —

"(A) IN GENERAL. — As a condition of any partition under this section, the rate of future accruals, during the period beginning on the date of the partition order and ending 15 years after the effective date of the partition, shall not exceed the lesser of —

"(i) a monthly benefit (payable as a single life annuity commencing at the participant's normal retirement age) equal or equivalent to 1 percent of the annual contributions required to be made with respect to a participant as of the first day of the first plan year that begins after the date of enactment of this section; or

"(ii) the accrual rate under the plan on such first day.

"(B) DETERMINATION OF EQUIVALENT RATE. — The plan sponsor may determine the equivalent rate of future accruals based on the standard or average contribution base units which the plan sponsor determines to be representative for active participants and such other factors as the plan sponsor determines to be relevant. Such determinations by the plan sponsor may be made on the basis of individual active participants, groups of active participants, or all active participants in total.

"(C) SPECIAL RULE FOR FUTURE ACCRUALS. — To the extent that the rate of future accruals exceeds the limitation determined under this paragraph, the plan sponsor shall adjust the rate of future accruals in accordance with this paragraph effective as of the date of the partition order.

"(2) ELIMINATION OF ADJUSTABLE BENEFITS. — As a condition of any partition under this section, the plan sponsor of an eligible multiemployer plan shall eliminate all adjustable benefits in the nature of an early retirement subsidy (including a subsidized early retirement actuarial reduction factor) for all participants not in pay status as of the date of the partition application. Nothing in this paragraph shall affect the right of a participant to receive an unsubsidized early retirement benefit.

"(d) SUCCESSOR PLANS AND ORIGINAL PLANS. —

"(1) IN GENERAL. — The plan created by the partition order is a successor plan to which section 4022A applies.

"(2) PLAN SPONSOR AND PLAN ADMINISTRATOR. — The plan sponsor of an eligible multiemployer plan prior to partition and the administrator of such plan shall be the plan sponsor and the administrator, respectively, of the original plan and the successor plan created by the partition order.

"(3) ORIGINAL PLAN. — The remaining plan after benefits have been transferred to the successor plan pursuant to the partition order is the original plan. Benefit payments made by the successor plan shall not constitute a reduction in benefits with respect to the original plan.

"(e) FINANCIAL ASSISTANCE TO SUCCESSOR PLANS FROM THE CORPORATION. —

"(1) IN GENERAL. — Upon approval of an application filed pursuant to subsection (i), the corporation shall provide financial assistance to each successor plan of an eligible multiemployer plan.

"(2) NONAPPLICABILITY OF REPAYMENT RULE. — Financial assistance provided to a successor plan pursuant to this subsection shall not be subject to the requirements of section 4261(b)(2), except that the corporation may condition receipt of financial assistance under this subsection on reasonable terms consistent with regulations prescribed by the corporation to prevent abuse of the multiemployer plan program or prevent unreasonable risk of loss to the corporation.

"(f) PAYMENT REQUIREMENTS OF ORIGINAL PLAN. — For each participant or beneficiary of the plan whose benefit or portion thereof was transferred to the successor plan, the original plan shall pay a monthly benefit to such participant or beneficiary for each month in which such benefit is in pay status following the effective date of such partition in an amount equal to the excess of —

"(1) the monthly benefit that would be paid to the participant or beneficiary under the terms of the original plan had the transfer of benefits not occurred (taking into account any applicable benefit reductions or plan amendments following the effective date of the partition); over

"(2) the monthly benefit for such participant or beneficiary that is paid by the successor plan.

"(g) TRANSFER OF BENEFITS. —

"(1) IN GENERAL. — A partition order under subsection (a) shall provide for a transfer of benefits from the original plan to the successor plan in the amount necessary for the original plan to be projected to remain solvent indefinitely, as defined in section 1.432(e)(9)-1(d)(5)(ii) of title 26, Code of Federal Regulations (excluding subparagraph (A)(2)), as in effect on the date on which such regulations were issued, using actuarial and other assumptions to be promulgated by the corporation in the regulations described in subsection (h)(4). Such transfer amounts shall be determined without respect to the amount guaranteed under section 4022A.

"(2) CONSIDERATIONS. —

"(A) IN GENERAL. — In determining the transfer amount under paragraph (1), the corporation shall take into account all obligations of the original plan, including the payment of benefits required under subsection (f) in excess of the amount paid by the successor plan and all plan expenses and premium amounts.

"(B) PROJECTION OF ASSETS AND LIABILITIES. — The amount of the transfer of benefits shall be based on a projection of plan assets and liabilities to the projected partition date, as specified in the partition application, and —

"(i) the projection of plan assets shall be based on the fair market value of plan assets as of the end of the last plan year preceding the date of the application, with appropriate adjustments for actual or anticipated plan experience through the projected partition date; and

"(ii) the projection of plan liabilities shall be based on the participant data used in the most recently completed actuarial valuation.

"(3) SPECIAL RULE FOR INSOLVENT PLANS. — With respect to an insolvent plan described in subsection (b)(1)(A), the corporation shall provide financial assistance to the original plan, as needed for the plan to pay to each participant and beneficiary in the successor plan the excess, if any, of —

"(A) the monthly benefit that would be paid to the participant or beneficiary under the terms of the original plan, prior to insolvency, had the transfer of benefits not occurred (taking into account any applicable benefit reductions or plan amendments following the effective date of the partition); over

"(B) the monthly benefit for such participant or beneficiary that is paid by the successor plan.

"(h) REGULATIONS. —

"(1) IN GENERAL. — The corporation shall issue regulations on the requirements for partition applications not later than 180 days after the date of enactment of this section. By regulation, the corporation may assign eligible multiemployer plans into groups, based on plan size (prioritizing larger plans), projected date of plan insolvency (prioritizing plans expected to become insolvent within 5 years), or such other factors as the corporation deems appropriate, for determining when an application for partition under this section may be filed. Any regulations issued under this section shall be interim final or final regulations.

"(2) EFFECT OF NO REGULATION. — If the corporation does not issue regulations within 180 days after the date of enactment of this section, any applications for partition under this section filed after the date that is 180 days after such date of enactment (and prior to the date regulations are issued) shall be deemed to be approved.

"(3) RULES FOR DETERMINING PARTICIPANTS AND BENEFICIARIES. — The regulations under this subsection shall include rules for determining which participants and beneficiaries are included in the transfer of benefits.

"(4) ACTUARIAL ASSUMPTIONS. — The regulations under this subsection shall prescribe acceptable actuarial assumptions, for purposes of an application, relating to the following:

"(A) Future investment returns which must be consistent with the applicable discount rate under section 304, except that —

"(i) in no case shall the assumption for future returns be less than 5.5 percent for purposes of determining the initial partition amount; and

"(ii) in no case, while the partition amount is being determined or while the partition is in effect, shall the assumption used for determining adjustments under subsection (j) be less than the lesser of —

"(I) the rate equal to the 24month average of the third segment rate (as defined in section 303(h)(2)(C)(iii)), as of the date the determination is made, without regard to section 303(h)(2)(C)(iv), increased by 2 percent; or

"(II) 5.5 percent.

"(B) Future contribution base units.

"(C) Future contribution rate increases, taking into account the adopted rehabilitation plan.

"(D) Future withdrawal liability payments.

"(E) Future administrative expenses.

"(F) Mortality.

"(G) Any other assumptions deemed by the corporation to be material.

"(5) RULES RELATING TO ASSUMPTIONS. —

"(A) INFORMATION REQUIRED. — For purposes of paragraph (4), when prescribing acceptable actuarial assumptions, the corporation shall not require a plan sponsor to obtain data or other information that a plan sponsor should not reasonably be expected to have in its possession, unless it can be obtained with reasonable effort and expense.

"(B) ECONOMIC ACTIVITY ASSUMPTION. — For purposes of paragraph (4)(B), an assumption related to future contribution base units shall be considered reasonable and appropriate for purposes of the application under this section, provided that —

"(i) if the recent experience of the plan has been declining contribution base units, the plan actuary may assume future contribution base units will continue to decline at the same annualized trend as over the 5 immediately preceding plan years unless such assumption is unreasonable based on criteria which may be prescribed by the corporation by regulation, and

"(ii) if the recent experience of the plan has been increasing, or neither increasing nor decreasing, contribution base units, the plan actuary may assume future contribution base units will remain unchanged indefinitely, unless such assumption is unreasonable based on criteria the corporation may prescribe.

"(6) DETERMINATION OF BENEFITS GUARANTEES. — The regulations under this subsection shall include rules for determining the amounts of benefits guaranteed under section 4022A, including acceptable methods to approximate credited service for participants and beneficiaries in pay status where records cannot reasonably be obtained by the plan administrator.

"(i) PARTITION APPLICATIONS. —

"(1) IN GENERAL. — An application for partition under this section submitted by a plan sponsor shall be filed electronically and contain the required information set forth in regulations promulgated by the corporation.

"(2) APPROVAL STANDARDS. — The corporation shall approve a partition application if the applying plan meets the requirements for a partition under this section.

"(3) EVALUATION OF INITIAL TRANSFER. — In reviewing an application under this section, the plan shall propose the initial amount of the transfer of benefits under the partition order that is required under subsection (g)(1) and the corporation shall review and modify the amount, if applicable, pursuant to its regulations.

"(4) DETERMINATIONS BY THE CORPORATION. —

"(A) DETERMINATION OF INELIGIBILITY. — If the corporation determines the plan to be ineligible under subsection (b) for a partition under this section, the corporation shall notify the plan sponsor in writing of such determination not later than 30 days after the application is filed. Such notice shall specify the reasons the plan is ineligible for a special partition. The applicant plan will have a period of at least 60 days, or longer if specified by the Corporation through regulations, to modify its application, which shall be subject to expedited review by the corporation and, for purposes of satisfying the 1-year filing requirement for special partition, will relate back to the date the application was initially filed.

"(B) INCOMPLETE APPLICATIONS. — If the corporation determines the application by the plan sponsor lacks information necessary for the corporation to approve or deny the application, the corporation shall notify the plan sponsor in writing, detailing which components are missing, not later than 30 days after the application is filed. Nothing in the preceding sentence shall prevent the corporation from asking the plan sponsor at a later date for additional information necessary to determine the partition amount.

"(C) FACTUAL SUBMISSIONS BY PLAN SPONSOR. — The factual submissions made by a plan sponsor in a partition application, including participant data and benefit calculations, shall be presumed to be correct, unless clearly erroneous.

"(j) POST-PARTITION ADJUSTMENTS. —

"(1) PROCESS FOR ADJUSTMENTS. —

"(A) IN GENERAL. — After benefits have been transferred under the partition order, the corporation shall, at least every third year thereafter, adjust the transfer of benefits, as necessary to enable the original plan to be projected to remain solvent indefinitely, consistent with limitations on guaranteed benefits (if applicable under paragraph (3)(C)). The adjustments shall be made based on such procedures as the corporation shall prescribe by regulation.

"(B) PLANS PROJECTED TO BE INSOLVENT. — If the original plan is not projected to be solvent 30 years after any adjustment review date (without regard to whether or not an adjustment takes place in connection with such date), taking into account the adjustments permitted by this paragraph, such plan shall electronically file a report with the corporation, as the corporation shall require by regulation. If the plan subsequently reports for 3 consecutive years for which an adjustment review is conducted that the plan is not projected to be solvent 30 years after the date of each such adjustment review, the plan shall be terminated.

"(2) BASIS FOR ADJUSTMENT. — The adjustment shall be based solely on, as applicable, updated participant data, calculations of guaranteed benefits for participants and beneficiaries covered under the successor plan, contribution experience, current actuarial assumptions (if changed since the initial transfer of benefits), and changes in the market value of the original plan's assets.

"(3) LIMITATIONS ON ADJUSTMENT. —

"(A) IN GENERAL. — The corporation shall not adjust under paragraph (1) the transfer of benefits to provide additional financial assistance if the corporation determines that the original plan or the bargaining parties committed an abuse of the multiemployer program with respect to the original plan or otherwise unreasonably took actions (or avoided taking actions) with the result that there is an increased risk of loss to the corporation with respect to the successor plan or the original plan.

"(B) END OF ADJUSTMENT AUTHORITY. — No adjustments under paragraph (1) to the transfer of benefits shall be allowed with respect to any plan year beginning 30 or more years after the date of the partition.

"(C) AGGREGATE LIMITS. — If the initial transfer of benefits from the plan under subsection (g) —

"(i) was less than 100 percent of the amount of benefits under the plan guaranteed under section 4022A for each participant, any adjustment under paragraph (1) shall not result in a benefit for any participant in the successor plan in excess of 100 percent of the participant's guaranteed benefit, determined as of the date of the initial transfer;

"(ii) was equal to or greater than 100 percent of the amount of benefits so guaranteed, any adjustment under paragraph (1) shall not result in a benefit for any participant in the successor plan in excess of the amount of the participant's benefit subject to the initial transfer; and

"(iii) was less than 5 percent of the amount of benefits so guaranteed, there shall be no adjustment under paragraph (1).

"(4) TERMINATED AND INSOLVENT PLANS. — With respect to an original plan partitioned under this section that subsequently is terminated or becomes insolvent, the benefits transferred under the partition order shall revert to the original plan, the partition shall be reversed, and financial assistance provided pursuant to the partition order shall cease.

"(5) REGULATIONS. — The corporation shall promulgate regulations describing the process and requirements for reporting and the circumstances under which plans will be terminated in accordance with the provisions of section 4041A pursuant to this subsection.

"(k) PLANS THAT IMPLEMENTED SUSPENSION OF BENEFITS. —

"(1) IN GENERAL. — An eligible multiemployer plan described in subsection (b)(1)(B)(i)(II) may be approved for a partition under this section only if it unwinds the suspension, and, if applicable, the previous partition described in such subsection in accordance with regulations to be issued by the corporation, in consultation with the Secretary of the Treasury. The unwinding of a suspension or partition described in such subsection must be contingent upon the corporation's approval of the application for partition under this section.

"(2) TIMING OF UNWINDING OF SUSPENSION OF BENEFITS. — In the case of a partition described in paragraph (1), the suspension of benefits shall be unwound retroactively. Benefits shall be restored to pre-suspension levels as of the effective date of the partition under this section and participants who are receiving benefits on the date of enactment of this section shall, beginning not later than 180 days after the approval of a partition order under this section, receive a special payment, payable over a period not to exceed 2 years, equal to the amount of benefits previously suspended as prescribed in regulations. Such plans are subject to the requirements of subsection (c).

"(l) FIDUCIARY PROTECTION. — Plan participants and beneficiaries shall not have a claim under section 409 or section 502 of this Act against plan fiduciaries with respect to an application for partition assistance made in good faith or the allocation of benefit liabilities between the successor plan and the original plan.

"(m) EFFECT OF PARTITION ON WITHDRAWAL LIABILITY. —

"(1) IN GENERAL. — A partition order under this section is taken into account in determining withdrawal liability under section 4201 of an employer that contributes to the original plan, provided that the employer remains a contributing employer to the original plan (and in compliance with any applicable funding improvement or rehabilitation plan) for a period of 15 years following the effective date of the liability transfer.

"(2) WITHDRAWALS AFTER LESS THAN 15 YEARS. —

"(A) IN GENERAL. — If an employer completely withdraws or partially withdraws from a plan that was partitioned under this section at any time within the 15-year period described in paragraph (1), the transfer of benefits under subsection (g) shall not be taken into account in computing the employer's complete or partial withdrawal liability, and the amount of the annual withdrawal liability payment amount otherwise determined shall be increased by 10 percent.

"(B) EXCEPTION. — Subparagraph (A) shall not apply —

"(i) if the complete or partial withdrawal is due to a decertification, a change in bargaining representatives, disclaimer of interest, or because of an event described in section 4218; or

"(ii) in the case of a partial withdrawal due to a bargaining unit or facility take-out if the contribution base units for the plan year immediately following the year of the partial withdrawal are at least 97 percent of the contribution base units for the plan year immediately preceding the year of the partial withdrawal.

"(3) EXCEPTION. — Paragraphs (1) and (2) shall not apply to an employer that first had an obligation to contribute to the plan partitioned under this section after the date of enactment of this section.

"(n) RESTRICTIONS ON BENEFIT IMPROVEMENTS. —

"(1) INCREASE IN PLAN LIABILITIES. —

"(A) IN GENERAL. — If the plan sponsor adopts a plan amendment that increases plan liabilities (due to any increase in benefits, any change in the accrual of benefits, or any change in the rate at which benefits become nonforfeitable) that takes effect after the effective date of the partition, the original plan shall make payments to the corporation for each year during the 20-year period following the effective date of the benefit increase. For purposes of this paragraph, an increase in benefits due to an increase in the contribution rate or compensation shall be considered a prohibited increase in benefits.

"(B) EXCEPTION FOR CERTAIN ACCRUALS. — Subparagraph (A) shall not apply to any change in future accruals after the end of the 15-year period during which such accruals are limited under subsection (c).

"(2) AMOUNT PAYABLE TO CORPORATION. — The amount paid by the original plan to the corporation under paragraph (1) each year shall be equal to the lesser of —

"(A) the total value of the increase in benefit payments for the year that is attributable to the benefit improvement; or

"(B) the total benefit payments from the successor plan for such year.

"(3) TIMING OF PAYMENT. — Payments under paragraph (2) shall be made by the original plan at the time of, and in addition to, any premium imposed by the corporation on the plan.

"(4) PBGC AUTHORITY. — The corporation is authorized to bring an action against the original plan to prevent or correct any and all actions by plan sponsors, a principal purpose of which is to evade or avoid payments due to the corporation under paragraph (2), or that may have the effect of evading or avoiding such payments. Payments under paragraph (2) shall be determined without regard to such actions by plan sponsors.

"(5) EXCEPTION FOR CERTAIN CHANGES. — The requirements of this subsection do not apply to an increase or change in benefits that is required by law or that is a de minimis change, as determined by the corporation.

"(o) POST-PARTITION DISCLOSURES. — Not later than 90 days after the first day of each plan year beginning after the effective date of a partition under this section, the plan sponsor of the original plan shall electronically file with the corporation a report including the following information:

"(1) The estimated funded percentage (as defined in section 305(k)(2)) as of the first day of such plan year, and the underlying actuarial value of assets and liabilities taken into account in determining such percentage.

"(2) The estimated amount of all investment returns for the original plan during the preceding plan year.

"(3) The market value of the assets of the plan (determined as provided in paragraph (1)) as of the last day of the plan year preceding such plan year.

"(4) The total value of all contributions made by employers and employees during the plan year preceding such plan year.

"(5) The total value of all benefits paid during the plan year preceding such plan year.

"(6) Cash flow projections for such plan year and the 29 succeeding plan years, and the assumptions used in making such projections.

"(7) Funding standard account projections for such plan year and the 9 succeeding plan years, and the assumptions used in making such projections.

"(8) Any significant reduction in the number of active participants during the plan year preceding such plan year, and the reason for such reduction.

"(9) A list of employers that withdrew from the plan in the plan year preceding such plan year, and the resulting reduction in contributions.

"(10) A list of employers that paid withdrawal liability to the plan during the plan year preceding such plan year and, for each employer, a total assessment of the withdrawal liability paid, the annual payment amount, and the number of years remaining in the payment schedule with respect to such withdrawal liability.

"(11) Any material changes to benefits, accrual rates, or contribution rates during the plan year preceding such plan year, and whether such changes relate to the conditions of the partition assistance.

"(12) Details regarding any funding improvement plan or rehabilitation plan and updates to such plan.

"(13) The number of participants and beneficiaries during the plan year preceding such plan year who are active participants, the number of participants and beneficiaries in pay status, and the number of terminated vested participants and beneficiaries.

"(14) For —

"(A) the first plan year after the effective date of the partition, a list of all employers that contributed to the plan during the plan year; and

"(B) subsequent plan years, changes to the list of contributing employers.

"(15) The information contained on the most recent annual return under section 6058 of the Internal Revenue Code of 1986 and actuarial report under section 6059 of such Code of the plan.

"(16) Copies of the plan document and amendments, other retirement benefit or ancillary benefit plans relating to the plan and contribution obligations under such plans, a breakdown of administrative expenses of the plan, participant census data and distribution of benefits, the most recent actuarial valuation report as of the plan year, financial reports, and copies of the portions of collective bargaining agreements relating to plan contributions, funding coverage, or benefits, and such other information as the corporation may reasonably require.

"(17) A list of the employers that contributed more than 5 percent of total contributions to the plan during the preceding plan year, and the amount contributed by each such employer.

Any information or documentary material submitted to the corporation pursuant to this subsection that could identify individual employers, if clearly designated by the person making the submission as confidential (on each page in the case of a document, and in the file name in the case of a digital file), shall be exempt from disclosure under section 552 of title 5, United States Code, and no such information or documentary material may be made public except as may be relevant to any administrative or judicial action or proceeding, including an informal rulemaking.

"(p) RESTRICTIONS ON CONTRIBUTION DECREASES. —

"(1) IN GENERAL. — Subject to paragraph (2), except in any plan year in which the plan is certified by the plan actuary as in unrestricted status pursuant to section 305(b)(1)(B), the plan sponsor of an original plan may not accept a collective bargaining agreement with respect to such original plan that includes a reduction in employer contribution rates.

"(2) EXCEPTION. — Under a process to be promulgated by regulation by the corporation, a plan sponsor of an original plan may petition the corporation for the authority to approve a collective bargaining agreement that contemplates a reduction in employer contribution rates. Such regulation shall include a requirement that a plan petitioning for such authority demonstrate that its existing contribution rates are higher than contribution rates paid on behalf of other workers covered by collective bargaining agreements in the same industry in nearby localities. The corporation shall approve the petition if the plan sponsor demonstrates that the reduction in contribution rates improves the long-term funding or solvency of the plan, and does not increase the corporation's expected loss with respect to the plan.

"(q) EFFECT ON ACCUMULATED FUNDING DEFICIENCY. — Any accumulated funding deficiency (as defined in section 304(a)) of a plan shall be reduced to zero as of the first day of the plan year during which the partition under this section is effective.

"(r) COORDINATION OF REPORTING AND DISCLOSURE REQUIREMENTS. — The corporation, the Secretary, and the Secretary of the Treasury may, individually or collectively, promulgate regulations to reduce reporting and disclosure obligations for successor plans, including coordinating with reporting and disclosure by original plans.".

(b) CONFORMING AMENDMENT. — Section 4233 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1413) is amended by adding at the end the following:

"(g) This section shall not apply to an eligible multiemployer plan described in section 4233A(b) that receives a special partition under that section.".

(c) CLERICAL AMENDMENT. — The table of contents in section 1 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1001 et seq.) is amended by inserting after the item relating to section 4233 the following:

"4233A. Special partitions of eligible multiemployer plans.".

Subtitle B — PBGC Reforms

SEC. 111. GUARANTEE RATE INCREASE FOR PLANS RECEIVING FINANCIAL ASSISTANCE.

(a) IN GENERAL. — Section 4022A(c)(1) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1322(c)(1)) is amended by striking subparagraph (A) and inserting the following:

"(A) 100 percent of the accrual rate up to $15, plus 75 percent of the lesser of —

"(i) $54.67, or

"(ii) the accrual rate, if any, in excess of $15, and".

(b) EFFECTIVE DATES. —

(1) IN GENERAL. — The amendments made by this section shall apply to financial assistance provided by the Pension Benefit Guaranty Corporation —

(A) to plans that become insolvent after the date of the enactment of this Act; or

(B) pursuant to a special partition under section 4233A of the Employee Retirement Income Security Act of 1974, as added by this Act.

(2) EXCEPTION FOR PARTITIONS ON OR BEFORE DATE OF ENACTMENT. — The amendments made by this section shall not apply to financial assistance provided by the Pension Benefit Guaranty Corporation pursuant to a partition of a multiemployer plan occurring on or before the date of the enactment of this Act.

SEC. 112. AMENDMENT TO DEFINITION OF INSOLVENCY.

(a) AMENDMENTS TO EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974. — Section 4245 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1426) is amended —

(1) by amending subsection (a) to read as follows:

"(a) Notwithstanding sections 203 and 204, an insolvent multiemployer plan shall suspend the payments of benefits which are not basic benefits, in accordance with this section, and terminate the plan under section 4041A(a)(4).";

(2) in subsection (b) —

(A) by striking paragraphs (1) and (2) and inserting the following:

"(1) a multiemployer plan is insolvent if the plan's available resources in any of the next 5 plan years are projected not to be sufficient to pay benefits under the plan when due for the plan year;";

(B) by redesignating paragraphs (3) and (4) as paragraphs (2) and (3), respectively; and

(C) in paragraph (2), as so redesignated, by inserting "expected" before "contributions";

(3) by striking subsection (c);

(4) by redesignating subsections (d) through (g) as subsections (c) through (f), respectively;

(5) in subsection (c), as so redesignated —

(A) in paragraph (1) —

(i) by striking "critical status, as described in subsection 305(b)(2),)" and inserting "such critical status)";

(ii) by striking "3 times" and inserting "10 times"; and

(iii) by striking "5 plan years" each place such term appears and inserting "8 plan years";

(B) in paragraph (2) —

(i) by striking "plan's available resources are not sufficient to pay benefits under the plan when due for the next plan year" and inserting "plan will be insolvent in any of the next 10 plan years"; and

(ii) by inserting "and the corporation" before the period at the end;

(C) by striking paragraph (3); and

(D) by redesignating paragraph (4) as paragraph (3);

(6) in subsection (d), as so redesignated —

(A) in paragraph (1) —

(i) by striking "subsection (d)(1) or (2)" and inserting "subsection (c)(1) or (2)"; and

(ii) by striking "Treasury," in subparagraph (A) and inserting "Treasury and";

(B) in paragraph (2) —

(i) by striking "resource benefit level determined in writing for that insolvency year" and inserting "reduction of benefit payments to the level of basic benefits and the termination of the plan under section 4041A(a)(4) as of the first day of the seventh full plan month of the plan's first insolvency year under subsection (b)(3)"; and

(ii) by striking "each insolvency year" and inserting "the first insolvency year";

(C) by striking paragraph (3); and

(D) by redesignating paragraphs (4) and (5) as paragraphs (3) and (4), respectively;

(7) in subsection (e), as so redesignated —

(A) in paragraph (1) by striking ", for which the resource benefit level is above the level of basic benefits,"; and

(B) by striking paragraph (2) and inserting after paragraph (1) the following new paragraph:

"(2) A plan sponsor who has determined that the plan's available resources for an insolvency year are below the level of basic benefits shall apply for financial assistance from the corporation under section 4261."; and

(8) in subsection (f), as so redesignated, by striking "Subsections (a) and (c)" and inserting "Subsection (a)".

(b) AMENDMENTS TO INTERNAL REVENUE CODE OF 1986. — Section 418E of the Internal Revenue Code of 1986 is amended —

(1) by amending subsection (a) to read as follows:

"(a) SUSPENSION OF CERTAIN BENEFIT PAYMENTS; TERMINATION. — Notwithstanding section 411, an insolvent multiemployer plan shall suspend the payments of benefits which are not basic benefits, in accordance with this section, and terminate the plan under section 4041A(a)(4) of the Employee Retirement Income Security Act of 1974.";

(2) in subsection (b) —

(A) by striking paragraphs (1) and (2) and inserting the following:

"(1) INSOLVENT MULTIEMPLOYER PLAN. — A multiemployer plan is insolvent if the plan's available resources in any of the next 5 plan years are projected not to be sufficient to pay benefits under the plan when due for the plan year.";

(B) by redesignating paragraphs (3) and (4) as paragraphs (2) and (3), respectively; and

(C) in paragraph (2), as so redesignated, by inserting "expected" before "contributions";

(3) by striking subsection (c);

(4) by redesignating subsections (d) through (h) as subsections (c) through (g), respectively;

(5) in subsection (c), as so redesignated —

(A) in paragraph (1) —

(i) by striking "critical status, as described in subsection 432(b)(2))" and inserting "such critical status)";

(ii) by striking "3 times" and inserting "10 times"; and

(iii) by striking "5 plan years" each place such term appears and inserting "8 plan years";

(B) in paragraph (2) —

(i) by striking "plan's available resources are not sufficient to pay benefits under the plan when due for the next plan year" and inserting "plan will be insolvent in any of the next 10 plan years"; and

(ii) by inserting "and the corporation" before the period at the end;

(C) by striking paragraph (3); and

(D) by redesignating paragraph (4) as paragraph (3);

(6) in subsection (d), as so redesignated —

(A) in paragraph (1), by striking "subsection (d)(1) or (2)" and inserting "subsection (c)(1) or (2)";

(B) in paragraph (2) —

(i) by striking "resource benefit level determined in writing for that insolvency year" and inserting "reduction of benefit payments to the level of basic benefits and the termination of the plan under section 4041A(a)(4) of the Employee Retirement Income Security Act of 1974 as of the first day of the seventh full plan month of the plan's first insolvency year under subsection (b)(3)";

(ii) by striking "each insolvency year" and inserting "the first insolvency year"; and

(iii) by striking "RESOURCE BENEFIT LEVEL" in the heading and inserting "NOTICE OF INSOLVENCY";

(C) by striking paragraph (3); and

(D) by redesignating paragraphs (4) and (5) as paragraphs (3) and (4), respectively;

(7) in subsection (e), as so redesignated —

(A) in paragraph (1) by striking ", for which the resource benefit level is above the level of basic benefits,"; and

(B) by striking paragraph (2) and inserting after paragraph (1) the following new paragraph:

"(2) PLANS WITHOUT AVAILABLE RESOURCES. — A plan sponsor who has determined that the plan's available resources for an insolvency year are below the level of basic benefits shall apply for financial assistance from the Pension Benefit Guaranty Corporation under section 4261 of the Employee Retirement Income Security Act of 1974."; and

(8) in subsection (g), as so redesignated, by striking "Subsections (a) and (c)" and inserting "Subsection (a)".

(c) REGULATIONS. — The Pension Benefit Guaranty Corporation shall issue regulations implementing the amendments made by this section. Such regulations shall address the assumptions a plan may use in projecting whether a plan's available resources in any of the next 5 plan years are projected not to be sufficient to pay benefits under the plan when due.

SEC. 113. TERMINATION OF MULTIEMPLOYER PLANS.

(a) TERMINATION BY COURT ORDER. — Section 4041A of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1341a) is amended by adding at the end the following:

"(g) EFFECT OF TERMINATION ORDER. — If a court orders the termination of a multiemployer plan under section 4042 —

"(1) the corporation shall determine whether the termination of such plan shall be carried out in accordance with paragraph (1) or (2) of subsection (a) (and such termination shall be treated as described in whichever of such paragraphs is applicable under the determination), and

"(2) the plan shall take such actions as the corporation determines necessary to implement the corporation's determination under paragraph (1) by such date as the corporation specifies in such determination.".

(b) TERMINATION BY REASON OF INSOLVENCY. —

(1) IN GENERAL. — Section 4041A(a) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1341a(a)) is amended —

(A) in paragraph (2), by striking "or" at the end;

(B) in paragraph (3) —

(i) by striking "section 4203(b)(1)" and inserting "section 4021(b)(1)"; and

(ii) by striking the period and inserting "; or"; and

(C) by adding at the end the following:

"(4) becoming insolvent (within the meaning of section 4245(b)(1)).".

(2) TIME OF TERMINATION. — Section 4041A(b) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1341a(b)) is amended by adding at the end the following new paragraphs:

"(3) Except as provided in paragraph (4), the date on which a plan terminates under paragraph (4) of subsection (a) is the first day of the seventh full plan month of the plan's first insolvency year under section 4245(b)(3).

"(4)(A) In the case of a multiemployer plan which is an insolvent plan on the date of enactment of this paragraph —

"(i) paragraph (4) of subsection (a) shall apply to such plan unless such plan applies for, and receives, a special partition under section 4233A, and

"(ii) the date on which plan terminates shall be determined under subparagraph (B).

"(B) In the case of a plan described in subparagraph (A), the date on which a plan terminates under paragraph (4) of subsection (a) is —

"(i) if the plan is not eligible for a special partition under section 4233A, the first day of the seventh full plan month following such date of enactment, except that such plan may, notwithstanding the amendment required to be adopted by the plan under section 4245(a), continue to provide service credit solely for purposes of vesting under the plan until such time as the plan's available resources are not sufficient to pay benefits under the plan, and

"(ii) if the plan applies for such special partition but the corporation does not approve it, the first day of the seventh full plan month following the final determination of the corporation disallowing such special partition.".

(3) ADOPTION OF AMENDMENT PROVIDING FOR NO SERVICE CREDIT. — Section 4245(a) of such Act (29 U.S.C. 1426(a)), as amended by this Act, is amended by adding at the end the following: "The insolvent multiemployer plan shall also, at the time of becoming insolvent, adopt an amendment which provides that participants will receive no credit for any purpose under the plan for service with any employer after the date specified in 4041A(b)(3) or (4), whichever is applicable.".

(4) OTHER AMENDMENTS. — Section 4041A of such Act of 1974 (29 U.S.C. 1341a) is amended —

(A) in subsection (c) —

(i) in the matter preceding paragraph (1) —

(I) by striking "Except" and inserting "Consistent with the provisions of section 4281, and except"; and

(II) by striking "paragraph (2)" and inserting "paragraph (1), (2), or (4)";

(ii) in paragraph (1), by striking "and" at the end;

(iii) by redesignating paragraph (2) as paragraph (3); and

(iv) by inserting after paragraph (1) the following:

"(2) suspend the payment of benefits in excess of the level of basic benefits, and";

(B) by striking subsection (d) and redesignating subsections (e) and (f) as subsections (d) and (e), respectively; and

(C) in subsection (d), as so redesignated —

(i) by striking "paragraph (1) or (3)" and inserting "paragraph (1), (3), or (4)";

(ii) by striking "termination date, unless" and inserting "termination date and the total contribution amount shall be not less than the average amount of the highest 3 contributions in the previous 10 years, unless"; and

(iii) by adding at the end the following new sentence: "Any liability under section 4201 due by an employer that withdraws from the plan after the plan termination date shall be offset by the contributions made under this subsection subsequent to the plan termination.".

(c) POOLING OF ASSETS. — Section 4041A of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1341a), as amended by this section, is further amended by adding at the end the following:

"(g) POOLING OF ASSETS. — Notwithstanding any other provision of this title, the corporation is authorized to pool assets of terminated or insolvent multiemployer plans with fewer than 5,000 participants or to consolidate such plans by merger, for purposes of administration, investment, payment of liabilities of all such plans, and such other purposes as it determinates to be appropriate in the administration of this title, if it determines that such action would reduce administrative expenses or avoid an increased risk of loss. The corporation may exercise this consolidation authority by administrative action without petitioning a court for an order to replace the plan's governing board of trustees, including receivership by the corporation, or to consolidate or merge any plans.".

(d) EFFECTIVE DATE. — The amendments made by this section shall take effect on the date of enactment of this section, except that the amendments made by subsection (b) shall also apply to multiemployer plans that are insolvent on such date.

SEC. 114. BENEFITS UNDER CERTAIN TERMINATED PLANS.

Section 4281 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1441) is amended —

(1) in subsection (a), by striking "section 4041A(d)" and inserting "Section 4041A(c)";

(2) by striking subsections (b), (c), and (d); and

(3) by inserting after subsection (a) the following:

"(b)(1) If a plan has been terminated pursuant to paragraph (1), (2), or (4) of section 4041A(a), the plan sponsor shall amend the plan to suspend benefits in excess of the level of basic benefits.

"(2) Any plan amendment required by this subsection shall, in accordance with regulations prescribed by the corporation, take effect not later than 6 months after the date on which the plan is terminated.

"(c)(1) The value of nonforfeitable benefits under a terminated plan described in subsection (a), and the value of the plan's assets, shall be determined in writing, in accordance with regulations prescribed by the corporation, as of the end of the plan year during which section 4041A(c) becomes applicable to such plan.

"(2) For purposes of this subsection, plan assets include outstanding claims for withdrawal liability (within the meaning of section 4001(a)(12).

"(3) If, according to the determination made under paragraph (1), the value of plan assets is sufficient to pay nonforfeitable benefits, the plan sponsor shall use the plan assets to purchase irrevocable commitments to provide such benefits from an insurer or otherwise distribute plan assets in satisfaction of the plan's obligations with respect to nonforfeitable benefits, in accordance with all applicable regulations.

"(d)(1) If, according to the determination made under subsection (c)(1), the value of nonforfeitable benefits exceeds the value of the plan's assets, the plan sponsor shall amend the plan to reduce benefits under the plan as provided in paragraph (2).

"(2) Any plan amendment required by paragraph (1) shall, in accordance with regulations prescribed by the corporation —

"(A) reduce benefits to the extent necessary to eliminate any benefits that are not nonforfeitable;

"(B) reduce accrued benefits to the extent that those benefits are not eligible for the corporation's guarantee under section 4022A(b); and

"(C) suspend payment of benefits which are not basic benefits under section 4022A(c).

"(e) The powers and duties under this section of a sponsor of a plan that is terminated as described in section 4041A, before or after the plan begins receiving financial assistance under section 4261, shall be prescribed by the corporation, and the corporation shall prescribe by regulation the requirements which assure that plan participants and beneficiaries receive adequate notice of any suspension of benefits.".

Subtitle C — Pension Insurance Modeling

SEC. 121. PENSION INSURANCE MODELING.

Section 40233(a) of the Moving Ahead for Progress in the 21st Century Act (126 Stat. 857; Public Law 112-141) is amended —

(1) in the subsection heading, by striking "ANNUAL";

(2) by striking "The Pension" and inserting "Not later than January 1, 2025, and not less frequently than once every 5 years thereafter, the Pension";

(3) by striking "an annual peer review" and inserting "a peer review"; and

(4) by striking the third sentence.

TITLE II — FUNDING RULES, WITHDRAWAL LIABILITY, AND OTHER REFORMS

Subtitle A — Minimum Funding Standard for Multiemployer Plans

SEC. 201. VALUATION OF PLAN LIABILITIES.

(a) AMENDMENTS TO INTERNAL REVENUE CODE OF 1986. —

(1) CHARGES TO FUNDING STANDARD ACCOUNT. — Subparagraph (B) of section 431(b)(2) of the Internal Revenue Code of 1986 is amended —

(A) by striking "and" at the end of clause (iii),

(B) by redesignating clause (iv) as clause (v),

(C) by striking "actuarial assumptions" in clause (v), as so redesignated, and inserting "actuarial assumptions not described in clause (iv)", and

(D) by inserting after clause (iii) the following new clause:

"(iv) separately, with respect to each plan year, an amount equal to the excess, if any, of —

"(I) the net increase (if any) in the unfunded past service liability resulting from a reduction in the interest rate under paragraph (6)(A) from the rate which applied for the preceding year, over

"(II) the amount in the investment risk reduction subaccount under paragraph (9), over a period of 30 years, and".

(2) CREDITS TO FUNDING STANDARD ACCOUNT. — Clause (iii) of section 431(b)(3)(B) of such Code is amended by inserting ", except that any amount of net gain resulting from an increase in the interest rate from the rate which applied for the preceding year shall first be offset against any unamortized amounts charged under paragraph (2)(B)(iv)" after "15 plan years".

(3) INTEREST. — Paragraph (6) of section 431(b) of such Code is amended to read as follows:

"(6) INTEREST. —

"(A) IN GENERAL. — 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 the unfunded past service liability. Notwithstanding any other provision of this section, the interest rate used shall not exceed —

"(i) 7.5 percent for actuarial valuations for plan years beginning after December 31, 2021, and before January 1, 2024,

"(ii) 7.25 percent for actuarial valuations for plan years beginning after December 31, 2023, and before January 1, 2028,

"(iii) 7.0 percent for actuarial valuations for plan years beginning after December 31, 2027, and before January 1, 2032,

"(iv) 6.75 percent for actuarial valuations for plan years beginning after December 31, 2031, and before January 1, 2036, and

"(v) 6.5 percent for actuarial valuations for plan years beginning after December 31, 2035.

Notwithstanding subsection (c), the plan sponsor may direct the plan actuary to use any rate which is not lower than the rate determined under subparagraph (B) (without regard to this sentence) and not greater than the rate determined under the preceding sentence for the plan year. Nothing in this subparagraph shall require a plan to take into account the interest rate limitation for subsequent years under the preceding sentence in determining actuarial valuations as of any given year.

"(B) INTEREST RATE FOR DETERMINING NORMAL COST. — Notwithstanding any other provision of this section, the interest rate used for determining the normal cost to be charged under paragraph (2) for the plan year shall be equal to the least of —

"(i) the interest rate applicable under subparagraph (A) for the plan year,

"(ii) a rate equal to the 24-month average of the third segment rate (as defined in section 430(h)(2)(C)(iii)), as of the date the determination is made, without regard to section 430(h)(2)(C)(iv), increased by 2 percent, or

"(iii) 5.5 percent.

"(C) EXCEPTION FOR CERTAIN PARTITIONED PLANS. — Notwithstanding subparagraph (A), in the case of a plan which has been partitioned under section 4233A of the Employee Retirement Income Security Act of 1974, the rate of interest used to determine normal cost under subparagraph (B) shall also be used to determine the unfunded past service liability of the plan.

"(D) EXCEPTION FOR PLANS USING A SPREAD-GAIN METHOD. — Notwithstanding subparagraph (B), and except as noted in subparagraph (C), in the case of a plan which uses a funding method other than the unit credit method or entry-age normal method —

"(i) the normal cost and past service liability shall be calculated using interest rates under subparagraph (A),

"(ii) an additional normal cost component shall be calculated in the same manner as under paragraph (9)(B)(i) based on the unit credit method, and

"(iii) the amount determined under clause (ii) shall be added to the otherwise calculated normal cost under the funding method in lieu of the credit under paragraph (9)(B)(i).".

(4) INVESTMENT RISK REDUCTION SUBACCOUNT. — Subsection (b) of section 431 of such Code is amended by adding at the end the following new paragraph:

"(9) INVESTMENT RISK REDUCTION SUBACCOUNT. — For purposes of this part —

"(A) IN GENERAL. — The funding standard account shall include an investment risk reduction subaccount used solely to offset losses attributable to reductions in the rate of interest used to determine the unfunded past service liability of the plan over time.

"(B) ANNUAL ADJUSTMENTS. — For a plan year, the investment risk reduction subaccount shall be —

"(i) credited with the net change (if any) in the normal cost for the immediately preceding plan year due to recalculation to reflect the difference in interest rates under paragraphs (6)(A) and (6)(B),

"(ii) charged with the amount of any reduction applied under paragraph (2)(B)(iv)(II), or, in the case of a plan using a spread-gain method, an amount equal to the lesser of —

"(I) the entire remaining balance of such subaccount immediately before the charge, or

"(II) the amount of the increase in the present value of benefits resulting from a decrease in the interest rate from the rate which applied for the preceding year,

"(iii) at the election of the plan sponsor, and pursuant to regulations to be issued by the Secretary, credited with the net decrease in the unfunded past service liability (or present value of benefits, in the case of a plan using a spread-gain method) resulting from an increase in the interest rate under paragraph (6)(A), not to exceed the amount of any previous charges to the account under clause (ii), reduced by any previous credits under this clause, and

"(iv) adjusted with interest at the rate under paragraph (6)(A), as applicable.".

(5) DETERMINATIONS TO BE MADE UNDER FUNDING METHOD. — Paragraph (1) of section 431(c) of such Code is amended to read as follows:

"(1) DETERMINATIONS TO BE MADE UNDER FUNDING METHOD. —

"(A) IN GENERAL. — For purposes of this part, normal costs, accrued liability, and experience gains and losses used to determine the unfunded past service liability for the plan shall be determined under the funding method used to determine costs under the plan and based on the interest rate under subparagraph (A) (or subparagraph (C), if applicable) of subsection (b)(6).

"(B) ADJUSTMENTS FOR FUNDING STANDARD ACCOUNT NORMAL COST. — Notwithstanding subparagraph (A), in the case of a plan using the unit credit funding method or the entry-age normal funding method, the normal cost for a plan year to be charged to the funding standard account under subsection (b)(2) shall be determined under the funding method used to determine costs under the plan and based on the interest rate under subsection (b)(6)(B).".

(b) AMENDMENTS TO EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974. —

(1) CHARGES TO FUNDING STANDARD ACCOUNT. — Subparagraph (B) of section 304(b)(2) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1084(b)(2)) is amended —

(A) by striking "and" at the end of clause (iii),

(B) by redesignating clause (iv) as clause (v),

(C) by striking "actuarial assumptions" in clause (v), as so redesignated, and inserting "actuarial assumptions not described in clause (iv)", and

(D) by inserting after clause (iii) the following new clause:

"(iv) separately, with respect to each plan year, an amount equal to the excess, if any, of —

"(I) the net increase (if any) in the unfunded past service liability resulting from a reduction in the interest rate under paragraph (6)(A) from the rate which applied for the preceding year, over

"(II) the amount in the investment risk reduction subaccount under paragraph (9), over a period of 30 years, and".

(2) CREDITS TO FUNDING STANDARD ACCOUNT. — Clause (iii) of section 304(b)(3)(B) of such Act (29 U.S.C. 1084(b)(3)(B)) is amended by inserting ", except that any amount of net gain resulting from an increase in the interest rate from the rate which applied for the preceding year shall first be offset against any unamortized amounts charged under paragraph (2)(B)(iv)" after "15 plan years".

(3) INTEREST. —

(A) IN GENERAL. — Paragraph (6) of section 304(b) of such Act (29 U.S.C. 1084(b)) is amended to read as follows:

"(6) INTEREST. —

"(A) IN GENERAL. — 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 the unfunded past service liability. Notwithstanding any other provision of this section, this interest rate shall not exceed —

"(i) 7.5 percent for actuarial valuations for plan years beginning after December 31, 2021, and before January 1, 2024,

"(ii) 7.25 percent for actuarial valuations for plan years beginning after December 31, 2023, and before January 1, 2028,

"(iii) 7.0 percent for actuarial valuations for plan years beginning after December 31, 2027, and before January 1, 2032,

"(iv) 6.75 percent for actuarial valuations for plan years beginning after December 31, 2031, and before January 1, 2036, and

"(v) 6.5 percent for actuarial valuations for plan years beginning after December 31, 2035.

Notwithstanding subsection (c), the plan sponsor may direct the plan actuary to use any rate which is not lower than the rate determined under subparagraph (B) (without regard to this sentence) and not greater than the rate determined under the preceding sentence for the plan year. Nothing in this subparagraph shall require a plan to take into account the interest rate limitation for subsequent years under the preceding sentence in determining actuarial valuations as of any given year.

"(B) INTEREST RATE FOR DETERMINING NORMAL COST. — Notwithstanding any other provision of this section, the interest rate used for determining the normal cost to be charged under paragraph (2) for the plan year shall be equal to the least of —

"(i) the interest rate applicable under subparagraph (A) for the plan year,

"(ii) a rate equal to the 24-month average of the third segment rate (as defined in section 303(h)(2)(C)(iii)), as of the date the determination is made, without regard to section 303(h)(2)(C)(iv), increased by 2 percent, or

"(iii) 5.5 percent.

"(C) EXCEPTION FOR CERTAIN PARTITIONED PLANS. — Notwithstanding subparagraph (A), in the case of a plan which has been partitioned under section 4233A, the rate of interest used to determine normal cost under subparagraph (B) shall also be used to determine the unfunded past service liability of the plan.

"(D) EXCEPTION FOR PLANS USING A SPREAD-GAIN METHOD. — Notwithstanding subparagraph (B), and except as noted in subparagraph (C), in the case of a plan which uses a funding method other than the unit credit method or entry-age normal method —

"(i) the normal cost and past service liability shall be calculated using interest rates under subparagraph (A),

"(ii) an additional normal cost component shall be calculated in the same manner as under paragraph (9)(B)(i) based on the unit credit method, and

"(iii) the amount determined under clause (ii) shall be added to the otherwise calculated normal cost under the funding method in lieu of the credit under paragraph (9)(B)(i).".

(B) CONFORMING AMENDMENT. — Subparagraph (A) of section 4233A(h)(4) of such Act, as added by this Act, is amended by inserting ", consistent with section 304(b)(6)(C)" before the period.

(4) INVESTMENT RISK REDUCTION SUBACCOUNT. — Subsection (b) of section 304 of such Act (29 U.S.C. 1084) is amended by adding at the end the following new paragraph:

"(9) INVESTMENT RISK REDUCTION SUBACCOUNT. — For purposes of this part —

"(A) IN GENERAL. — The funding standard account shall include an investment risk reduction subaccount used solely to offset losses attributable to reductions in the rate of interest used to determine the unfunded past service liability of the plan over time.

"(B) ANNUAL ADJUSTMENTS. — For a plan year, the investment risk reduction subaccount shall be —

"(i) credited with the net change (if any) in the normal cost for the immediately preceding plan year due to recalculation to reflect the difference in interest rates under paragraphs (6)(A) and (6)(B),

"(ii) charged with the amount of any reduction applied under paragraph (2)(B)(iv)(II), or, in the case of a plan using a spread-gain method, an amount equal to the lesser of —

"(I) the entire remaining balance of such subaccount immediately before the charge, or

"(II) the amount of the increase in the present value of benefits resulting from a decrease in the interest rate from the rate which applied for the preceding year,

"(iii) at the election of the plan sponsor, and pursuant to regulations to be issued by the Secretary of the Treasury, credited with the net decrease in the unfunded past service liability (or present value of benefits, in the case of a plan using a spread-gain method) resulting from an increase in the interest rate under paragraph (6)(A), not to exceed the amount of any previous charges to the account under clause (ii), reduced by any previous credits under this clause, and

"(iv) adjusted with interest at the rate under paragraph (6)(A), as applicable.".

(5) DETERMINATIONS TO BE MADE UNDER FUNDING METHOD. — Paragraph (1) of section 304(c) of such Act (29 U.S.C. 1084(c)) is amended to read as follows:

"(1) DETERMINATIONS TO BE MADE UNDER FUNDING METHOD. —

"(A) IN GENERAL. — For purposes of this part, normal costs, accrued liability, and experience gains and losses used to determine the unfunded past service liability for the plan shall be determined under the funding method used to determine costs under the plan and based on the interest rate under subparagraph (A) (or subparagraph (C), if applicable) of subsection (b)(6).

"(B) ADJUSTMENTS FOR FUNDING STANDARD ACCOUNT NORMAL COST. — Notwithstanding subparagraph (A), in the case of a plan using the unit credit funding method or the entry-age normal funding method, the normal cost for a plan year to be charged to the funding standard account under subsection (b)(2) shall be determined under the funding method used to determine costs under the plan and based on the interest rate under subsection (b)(6)(B).".

(c) PLAN PETITIONS TO INCREASE INTEREST ASSUMPTIONS. —

(1) IN GENERAL. — Pursuant to regulations to be issued by the Secretary of the Treasury (or such Secretary's delegate), a multiemployer plan must petition the Secretary of the Treasury (or delegate) for any increase in the interest assumption made after a 30-year amortization base is established in accordance with section 431(b)(2)(B)(iv) of the Internal Revenue Code of 1986 and section 304(b)(2)(B)(iv) of the Employee Retirement Income Security Act of 1974 (as added by this Act). The Secretary of the Treasury (or delegate) shall approve such request upon a determination that the change is reasonably supported by changes in the financial markets or changes in the plan's asset allocation, and is consistent with the manner in which prior changes in interest rate assumptions were determined since the date of the enactment of this Act.

(2) APPROVAL. — If the Secretary of the Treasury (or such Secretary's delegate) does not approve or deny any petition submitted pursuant to paragraph (1) within 180 days of receiving such petition, such petition shall be deemed to have been approved.

(d) EFFECTIVE DATE. — The amendments made by this section shall apply to plan years beginning after December 31, 2021.

Subtitle B — Additional Funding Rules for Multiemployer Plans

PART I — PLAN STATUS AMENDMENTS

SEC. 211. AMENDMENTS TO INTERNAL REVENUE CODE OF 1986.

(a) RULES APPLYING TO ALL MULTIEMPLOYER PLANS. —

(1) IN GENERAL. — Subsection (a) of section 432 of the Internal Revenue Code of 1986 is amended —

(A) by striking "a multiemployer plan in effect on July 16, 2006 — " and inserting "any multiemployer plan — ",

(B) by redesignating paragraphs (1), (2), and (3) as paragraphs (2), (3), and (4), respectively,

(C) by inserting before paragraph (2), as so redesignated, the following new paragraph:

"(1) the rules of subsection (c) shall apply,",

(D) by striking "subsection (c)" in paragraph (2)(A), as so redesignated, and inserting "subsection (d)",

(E) by striking "subsection (d)" in paragraph (2)(B), as so redesignated, and inserting "subsection (e)",

(F) by striking "subsection (e)" in paragraph (3)(A), as so redesignated, and inserting "subsection (f)",

(G) by striking "subsection (f)" in paragraph (3)(B), as so redesignated, and inserting "subsection (g)", and

(H) by striking "subsection (e)(9)" in paragraph (4)(B), as so redesignated, and inserting "subsection (f)(9)".

(2) RULES OF IMMEDIATE APPLICATION. — Section 432 of such Code is amended —

(A) by redesignating subsections (c), (d), (e), (f), (g), (h), (i), and (j) as subsections (d), (e), (f), (g), (h), (i), (j), and (k), respectively, and

(B) by inserting after subsection (b) the following new subsection:

"(c) RULES APPLYING TO ALL MULTIEMPLOYER PLANS. —

"(1) BENEFIT INCREASES. —

"(A) INCREASES BY PLAN AMENDMENT. —

The plan sponsor of any multiemployer plan shall not adopt a plan amendment which increases plan liabilities (as determined as of the date of the adoption of the amendment) due to any increase in benefits, any change in the accrual rate of benefits, or any change in the rate at which benefits become nonforfeitable, unless —

"(i) if the plan is in unrestricted status as of the adoption of such amendment, the plan actuary certifies in accordance with subsection (b)(4) that the increase in liabilities will not cause the plan to no longer be in unrestricted status,

"(ii) if the plan is in stable status as of the adoption of such amendment, the plan actuary certifies in accordance with subsection (b)(4) that any such increase or change in benefits will be paid from additional contributions not required by any collective bargaining agreement in effect as of the adoption of the amendment,

"(iii) if the plan is in endangered status as of the adoption of such amendment, the plan actuary certifies in accordance with subsection (b)(4) that any such increase or change in benefits will be paid from additional contributions not contemplated in any current funding improvement plan, or

"(iv) the increase or change in benefits is required by law or is a de minimis change.

"(B) INCREASES UNDER CRITICAL OR CRITICAL AND DECLINING STATUS. — Unless required as a condition of qualification under part I of this subchapter or to comply with other applicable law, in the case of a plan which is in critical or critical and declining status, no increase in benefits, change in the accrual rate of benefits, or change in the rate at which benefits become nonforfeitable which increases plan liabilities shall take effect while the plan is in such status, without regard to whether such increase or change would otherwise occur under the provisions of the plan, unless the increase in plan liabilities due to the change is de minimis.

"(2) CONTRIBUTION REDUCTIONS. — The plan sponsor of any multiemployer plan shall not accept any collective bargaining agreement or participation agreement which reduces the rate of contributions under the plan for any participants, suspends contributions with respect to any period of service, or directly or indirectly excludes younger, probationary, or newly hired employees from participation in the plan, unless —

"(A) the plan is in unrestricted status as of the adoption of such agreement and the plan actuary certifies in accordance with subsection (b)(4) that the reduction in contributions will not cause the plan to no longer be in unrestricted status,

"(B) the reduction in contributions is accompanied by a reduction in future accruals for the affected participants, and the plan actuary certifies in accordance with subsection (b)(4) that the combined effect of the changes in contributions and benefits is not projected to reduce the funded percentage of the plan in any year, or

"(C) subject to regulations issued by the Secretary, the plan sponsor reasonably determines that the acceptance of such an agreement is in the best interests of plan participants and beneficiaries and that rejection of the agreement would have an adverse financial effect on the plan.".

(3) STABLE AND UNRESTRICTED PLANS. — Subsection (b) of section 432 of such Code is amended —

(A) by striking "ENDANGERED AND CRITICAL" in the heading,

(B) by redesignating paragraphs (1), (2), (3), (4), (5), and (6) as paragraphs (2), (3), (4), (5), (6), and (7), respectively, and

(C) by inserting before paragraph (2) the following new paragraph:

"(1) STABLE AND UNRESTRICTED STATUS. —

"(A) STABLE. — A multiemployer plan is in stable status for a plan year if, as determined by the plan actuary under paragraph (4), the plan is not in unrestricted status for the plan year, is not in endangered, critical, or critical and declining status for the plan year, and is not described in paragraph (6).

"(B) UNRESTRICTED. — A multiemployer plan is in unrestricted status for a plan year if, as determined by the plan actuary under paragraph (4) —

"(i) the plan is not in endangered, critical, or critical and declining status for the plan year,

"(ii) the plan is not described in paragraph (6), and

"(iii) as of the beginning of the plan year —

"(I) the plan's current liability funded percentage for such plan year is at least 70 percent and the plan's projected funded percentage as of the first day of the 15th succeeding plan year is at least 115 percent, or

"(II) the plan's current liability funded percentage for such plan year is at least 80 percent.

"(C) CURRENT LIABILITY FUNDED PERCENTAGE. — For purposes of this section, the term 'current liability funded percentage' means the percentage equal to a fraction the numerator of which is the value of plan assets (as determined for purposes of section 431(c)(6)(A)(ii)(II)) and the denominator of which is the current liabilities of the plan (as defined in section 431(c)(6)(D)).".

(4) AMENDMENT TO ANNUAL CERTIFICATION BY PLAN ACTUARY. — Subparagraph (A) of paragraph (4) (as redesignated by paragraph (3)) of section 432(b) of such Code is amended by inserting "whether or not the plan is in unrestricted or stable status for such plan year," in clause (i) before "whether or not the plan is in endangered status".

(5) CONFORMING AMENDMENTS. —

(A) Paragraphs (2) and (3) of section 432(b) of such Code, as redesignated by paragraph (3), are each amended by striking "paragraph (3)" and inserting "paragraph (4)".

(B) Section 432(b)(2) of such Code, as so redesignated and amended, is further amended by striking "paragraph (5)" and inserting "paragraph (6)".

(C) Section 432(b)(4) of such Code, as so redesignated, is amended —

(i) by striking "paragraph (4)" in subparagraph (B)(iv) thereof and inserting "paragraph (5)",

(ii) by striking "subsection (e)(9)" both places it appears in subparagraph (B)(v) and inserting "subsection (f)(9)",

(iii) by striking "subsection (e)(3)(A)(ii)" in subparagraph (B)(v) and inserting "subsection (f)(3)(A)(ii)",

(iv) by striking "subsection (e)" in subparagraph (B)(v) and inserting "subsection (f)",

(v) by striking "paragraph (4)" each place it appears in subparagraphs (D)(i) and (D)(v) thereof and inserting "paragraph (5)",

(vi) by striking "subsection (e)(8)" in subparagraph (D)(ii)(I) thereof and inserting "subsection (f)(8)",

(vii) by striking "paragraph (5)" in subparagraph (D)(iii) thereof and inserting "paragraph (6)", and

(viii) by striking "(iii) In the case of" in subparagraph (D)(iii) thereof and inserting "(iii) SPECIAL RULE. — ".

(D) Section 432(b)(5) of such Code, as redesignated by paragraph (3), is amended —

(i) by striking "paragraph (2)" and inserting "paragraph (3)",

(ii) by striking "paragraph (3)(B)(iv)" and inserting "paragraph (4)(B)(iv)",

(iii) by striking "paragraph (3)" in subparagraph (A) thereof and inserting "paragraph (4)",

(iv) by striking "paragraph (3)(A)" in subparagraph (A) thereof and inserting "paragraph (4)(A)",

(v) by striking "paragraph (2)" in subparagraph (B) thereof and inserting "paragraph (3)", and

(vi) by striking "subsection (e)(4)(B)" in subparagraph (C) thereof and inserting "subsection (f)(4)(B)".

(E) Section 432(b)(6)(A) of such Code, as so redesignated, is amended —

(i) by striking "paragraph (3)(A)" and inserting "paragraph (4)(A)",

(ii) by striking "paragraph (1)(A)" and inserting "paragraph (2)(A)", and

(iii) by striking "paragraph (1)(B)" and inserting "paragraph (2)(B)".

(F) Section 432(b)(7) of such Code, as so redesignated, is amended by striking "paragraph (2)" and inserting "paragraph (3)".

(G) Paragraphs (1)(A), (4)(A)(ii), (4)(C)(i), (4)(C)(ii), (4)(D), (5)(A)(i), (5)(B), and (8) of subsection (d), and subsections (e)(2), (f)(1)(A), (f)(4)(B)(i), (f)(4)(B)(ii)(I), (f)(5), and (g)(3) of section 432 of such Code, as respectively redesignated by paragraph (2), are each amended by striking "subsection (b)(3)(A)" and inserting "subsection (b)(4)(A)".

(H) Section 432(d)(3)(A)(i)(I) of such Code, as so redesignated, is amended by striking "paragraph (b)(3)" and inserting "subsection (b)(4)".

(I) Section 432(d)(4)(D) of such Code, as so redesignated, is amended by striking "subsection (d)" and inserting "subsection (e)".

(J) Section 432(e) of such Code, as so redesignated, is amended to read as follows:

"(e) RULES FOR OPERATION OF PLAN DURING ADOPTION AND IMPROVEMENT PERIODS. — A plan may not be amended after the date of the adoption of a funding improvement plan under subsection (d) so as to be inconsistent with the funding improvement plan or the requirements of subsection (c).".

(K) Clauses (i)(I) and (ii)(I) of section 432(f)(4)(B) of such Code, as so redesignated, are each amended by striking "subsection (b)(2)" and inserting "subsection (b)(3)".

(L) Subsections (f)(8)(A)(ii) and (g)(2)(A) of section 432 of such Code, as so redesignated, are each amended by striking "subsection (b)(3)(D)" and inserting "subsection (b)(4)(D)".

(M) Section 432(f)(9)(J) of such Code, as so redesignated, is amended —

(i) by striking "subsection (b)(3)" and inserting "subsection (b)(4)", and

(ii) by striking "paragraphs (1) and (2)" in clause (i) thereof and inserting "paragraphs (2) and (3)".

(N) Subparagraphs (A) and (B) of section 432(g)(1) of such Code, as so redesignated, are each amended by striking "subsection (e)" and inserting "subsection (f)".

(O) Paragraph (2)(A) of section 432(g) of such Code, as so redesignated, is amended by striking "(b)(3)(D)" and inserting "(b)(4)(D)".

(P) Section 432(h) of such Code, as so redesignated, is amended —

(i) by striking "subsection (e)(8) or (f)" in paragraph (1) thereof and inserting "subsection (f)(8) or (g)",

(ii) by striking "subsection (e)(9)" in paragraph (1) thereof and inserting "subsection (f)(9)",

(iii) by striking "subsection (e)(7)" in paragraph (2) thereof and inserting "subsection (f)(7)", and

(iv) by striking "rehabilitation plan" and all that follows in paragraph (3)(B) thereof and inserting "rehabilitation plan. The preceding sentence shall not apply to any increase in contribution requirements due to increased levels of work, employment, or periods for which compensation is provided, except to the extent such an increase is used to provide an increased accrual rate of benefits or change in the rate at which benefits become nonforfeitable which increases plan liabilities.".

(Q) Section 432(i) of such Code, as so redesignated, is amended —

(i) by striking "subsection (c)" and inserting "subsection (d)", and

(ii) by striking "subsection (e)" and inserting "subsection (f)".

(R) Section 432(j)(2) of such Code, as so redesignated, is amended by striking "subsections (c) and (e)" and inserting "subsections (d) and (f)".

(S) Section 412(b)(3) of such Code is amended by striking "section 432(e)" and inserting "section 432(f)".

(T) Section 418E of such Code, as amended by this Act, is further amended —

(i) by striking "432(b)(2)" each place it appears in subsections (c)(1), (c)(2), (d)(1), and (d)(2), as redesignated by section 112, and inserting "432(b)(3)", and

(ii) by striking "432(e)(9)" in subsection (g), as so redesignated, and inserting "432(f)(9)".

(U) Section 4971(g) of such Code is amended —

(i) by striking "432(e)" in paragraph (3)(B)(i) and inserting "432(f)",

(ii) by striking "432(b)(3)(A)(ii)" in paragraph (3)(B)(ii) and inserting "432(b)(4)(A)(i)(II)",

(iii) by striking "432(e)(1)(A)" in paragraph (4)(B)(ii) and inserting "432(f)(1)(A)", and

(iv) by striking "432(j)(9)" in paragraph (4)(C)(ii) and inserting "432(k)(9)".

(V) Subsection (c)(1) of section 4980I of such Code, as added by this Act, is amended by adding at the end the following: "Such term shall not include such an original plan for any plan year in which the plan is in unrestricted status (as defined in section 432(b)(1)(B)).".

(W) The heading of section 432 of such Code is amended by striking "IN ENDANGERED STATUS OR CRITICAL STATUS".

(6) WITHDRAWAL LIABILITY DETERMINATION FOR PLANS EMERGING FROM ENDANGERED OR CRITICAL STATUS. — Section 432(h) of such Code, as redesignated by paragraph (2) and as amended by paragraph (5), is further amended by striking paragraph (4) and by inserting after paragraph (3) the following new paragraph:

"(4) EMERGENCE FROM ENDANGERED OR CRITICAL STATUS. —

"(A) IN GENERAL. — In the case of increases in the contribution rate (or other increases in contribution requirements unless due to increased levels of work, employment, or periods for which compensation is provided) disregarded pursuant to paragraph (3), this subsection shall cease to apply as of the later of —

"(i) the end of the first plan year following the plan year in which the plan is no longer in endangered or critical status, or

"(ii) the end of the plan year which includes the expiration date of the first collective bargaining agreement requiring plan contributions which expires after the plan is no longer in endangered or critical status.

"(B) HIGHEST CONTRIBUTION RATE. —

Notwithstanding subparagraph (A), once the plan emerges from endangered or critical status —

"(i) increases in the contribution rate disregarded pursuant to paragraph (3) shall continue to be disregarded in determining the highest contribution rate under section 4219(c) of such Act for plan years during which the plan was in endangered or critical status, and

"(ii) the highest contribution rate for purposes of such section shall be the greater of —

"(I) the sum of —

"(aa) the employer's contribution rate as of the later of the last day of the last plan year ending before December 31, 2014, and the last day of the plan year for which the employer first had an obligation to contribute to the plan, and

"(bb) any contribution increases determined in accordance with this section after such later date and before the date the employer withdraws from the plan, or

"(II) the highest contribution rate for any plan year after the plan year which includes the earlier of —

"(aa) the expiration date of the first collective bargaining agreement applicable to the withdrawing employer requiring plan contributions which expires after the plan is no longer in endangered or critical status, or

"(bb) the date as of which the withdrawing employer negotiated a contribution rate effective after the plan year in which the plan is no longer in endangered or critical status.".

(7) EFFECTIVE DATE. — The amendments made by this subsection shall take effect on the date of the enactment of this Act.

(b) DETERMINATION OF ENDANGERED STATUS. — Paragraph (2) of section 432(b) of the Internal Revenue Code of 1986, as redesignated by subsection (a)(3), is amended to read as follows:

"(2) ENDANGERED STATUS. — A multiemployer plan is in endangered status for a plan year if, as determined by the plan actuary under paragraph (5), the plan is not in critical or declining status for the plan year and is not described in paragraph (7), and, as of the beginning of the plan year —

"(A) the plan's funded percentage for such plan year is less than 80 percent,

"(B) the plan is projected to have an accumulated funding deficiency for any of the 9 succeeding plan years, taking into account any extension of amortization periods under section 431(d), or

"(C) the plan's projected funded percentage as of the first day of the 15th succeeding plan year is less than 100 percent.".

(c) DETERMINATION OF CRITICAL STATUS. — Paragraph (3) of section 432(b) of the Internal Revenue Code of 1986, as redesignated by subsection (a)(3), is amended to read as follows:

"(3) CRITICAL STATUS. —

"(A) IN GENERAL. — A multiemployer plan is in critical status for a plan year if, as determined by the plan actuary under paragraph (5), the plan is not in declining status for the plan year and, as of the beginning of the plan year —

"(i) the plan's funded percentage is less than 65 percent,

"(ii) the plan has an accumulated funding deficiency for the plan year, or is projected to have such an accumulated funding deficiency for any of the 6 succeeding plan years, taking into account any extension of amortization periods under section 431(d), or

"(iii) the plan's projected funded percentage as of the first day of the 15th succeeding plan year is less than 80 percent.

"(B) ORIGINAL PLANS. — Notwithstanding subparagraph (A), a multiemployer plan which is an original plan pursuant to section 4233A(d)(3) of the Employee Retirement Income Security Act of 1974 shall be treated as being in critical status for the period of 15 consecutive plan years beginning with the plan year that includes the date of the partition under such section 4233A.".

(d) DECLINING STATUS. —

(1) IN GENERAL. —

(A) The following provisions of section 432 of the Internal Revenue Code of 1986 are each amended by striking "critical and declining" each place it appears and inserting "declining":

(i) Subsection (a)(4) (as redesignated by subsection (a)(1)).

(ii) Subparagraphs (A) and (B)(i) of subsection (b)(1), as added by subsection (a)(3).

(iii) Subsection (b)(4)(B)(v) (as redesignated by subsection (a)(3)), and the heading thereof.

(iv) Paragraph (1)(B), and the heading of such paragraph (1)(B), of subsection (c), as added by subsection (a)(2).

(v) The heading of paragraph (9) of subsection (f) (as redesignated by subsection (a)(2)).

(vi) Subparagraphs (A), (C), (G)(i), and (J) of subsection (f)(9) (as so redesignated).

(vii) Subsection (h)(1) (as so redesignated).

(B) Section 418E(g) of such Code, as amended by section 112 and subsection (a), is further amended by striking "critical and declining status" and inserting "declining status".

(2) DETERMINATION OF DECLINING STATUS. —

(A) IN GENERAL. — Subsection (b) of section 432 of such Code is amended —

(i) by striking paragraph (7), as redesignated by subsection (a)(3),

(ii) by redesignating paragraphs (4), (5), and (6), as so redesignated, as paragraphs (5), (6), and (7), respectively, and

(iii) by inserting after paragraph (3), as so redesignated, the following new paragraph:

"(4) DECLINING STATUS. — A multiemployer plan is in declining status for a plan year if —

"(A) as determined by the plan actuary under paragraph (5), as of the beginning of the plan year the plan is projected to become insolvent within the plan year or any of the 29 succeeding plan years,

"(B) the plan is otherwise in critical status for the plan year as determined by the plan actuary under paragraph (5), and the plan sponsor determines that, based on reasonable actuarial assumptions and upon exhaustion of all reasonable measures, the plan cannot reasonably be expected to emerge from critical status within the next 30 plan years, or

"(C) the plan has a funded percentage for the plan year which is greater than the projected funded percentage as of the first day of the 15th succeeding plan year, unless the funded percentage for the plan year is 100 percent or greater and the projected funded percentage as of the first day of such 15th succeeding plan year is less than 100 percent.".

(B) CONFORMING AMENDMENTS. —

(i) Paragraph (1) of section 432(b) of such Code, as added by subsection (a)(3), is amended —

(I) by striking "paragraph (4)" each place it appears in subparagraphs (A) and (B) and inserting "paragraph (5)", and

(II) by striking "paragraph (6)" each place it appears in subparagraphs (A) and (B) and inserting "paragraph (7)".

(ii) Subsection (c) of section 432 of such Code, as added by subsection (a)(2), is amended by striking "(b)(4)" each place it appears in paragraphs (1)(A)(i), (1)(A)(ii), (1)(A)(iii), (2)(A), and (2)(B) and inserting "(b)(5)".

(iii) Section 432(b)(5) of such Code, as further redesignated by subparagraph (A) and as amended by section 321 and subsection (a), is further amended —

(I) by striking "paragraph (5)" in subparagraph (B)(iv) thereof and inserting "paragraph (6)",

(II) by striking "paragraph (5)" each place it appears in subparagraphs (D)(i) and (D)(vi) thereof and inserting "paragraph (6)", and

(III) by striking "paragraph (6)" in subparagraph (D)(iv) thereof and inserting "paragraph (7)".

(iv) Section 432(b)(6) of such Code, as so further redesignated and amended, is further amended —

(I) by striking "paragraph (4)(B)(iv)" and inserting "paragraph (5)(B)(iv)",

(II) by striking "paragraph (4)" in subparagraph (A) thereof and inserting "paragraph (5)", and

(III) by striking "paragraph (4)(A)" in subparagraph (A) thereof and inserting "paragraph (5)(A)".

(v) Section 432(b)(7)(A) of such Code, as so further redesignated and amended, is further amended —

(I) by striking "paragraph (4)(A)" and inserting "paragraph (5)(A)", and

(II) by striking "either paragraph (2)(A) or paragraph (2)(B)" and inserting "any subparagraph of paragraph (2)".

(vi) Section 432(b)(7)(B) of such Code, as so further redesignated, is amended by striking "critical or endangered" and inserting "endangered, critical, or declining".

(vii) Paragraphs (1)(A), (4)(A)(ii), (4)(C)(i), (4)(C)(ii), (4)(D), and (8) of subsection (d), and subsections (f)(1)(A), (f)(4)(B)(i), (f)(4)(B)(ii)(I), (f)(5), and

(g)(3) of section 432 of such Code, as redesignated and amended by subsection (a), are each further amended by striking "subsection (b)(4)(A)" and inserting "subsection (b)(5)(A)".

(viii) Section 432(d)(3)(A)(i)(I) of such Code, as so redesignated and amended, is further amended by striking "subsection (b)(4)" and inserting "subsection (b)(5)".

(ix) Subsections (f)(8)(A)(ii) and (g)(2)(A) of section 432 of such Code, as so redesignated and amended, are each further amended by striking "subsection (b)(4)(D)" and inserting "subsection (b)(5)(D)".

(x) Section 432(f)(9)(J) of such Code, as so redesignated and amended, is further amended by striking "subsection (b)(4)" and inserting "subsection (b)(5)".

(3) SOLVENCY PLAN. —

(A) IN GENERAL. — Paragraph (4) (as redesignated by subsection (a)(1) and amended by paragraph (1)) of section 432(a) of such Code is amended —

(i) by redesignating subparagraph (B) as subparagraph (D), and

(ii) by striking subparagraph (A) and inserting before subparagraph (D) (as so redesignated) the following new subparagraphs:

"(A) the plan sponsor shall adopt and implement a solvency plan in accordance with the requirements of subsection (h),

"(B) any rehabilitation plan in place as of the date the plan enters declining status shall continue to apply throughout the solvency plan adoption period,

"(C) the requirements of subsection (i) and paragraphs (6) and (7) of subsection (f) shall apply during the solvency plan adoption period and the solvency attainment period, and".

(B) ADOPTION OF PLAN. — Section 432 of such Code, as amended by this section, is further amended —

(i) by redesignating subsection (l), as added by title V of this Act, as subsection (n), and by further redesignating subsections (h), (i), (j), and (k), as redesignated by subsection (a)(2), as subsections (j), (k), (l), and (m), respectively, and

(ii) by inserting after subsection (g), as redesignated by subsection (a)(2), the following new subsections:

"(h) SOLVENCY PLAN MUST BE ADOPTED FOR MULTIEMPLOYER PLANS IN DECLINING STATUS. —

"(1) IN GENERAL. — In any case in which a multiemployer plan is in declining status for a plan year, the plan sponsor, in accordance with this subsection —

"(A) shall adopt a solvency plan not later than 240 days following the required date for the actuarial certification of declining status under subsection (b)(5)(A), and

"(B) within 30 days after the adoption of the solvency plan shall provide to the bargaining parties 1 or more schedules showing revised benefit structures, revised contribution structures, or both, which, if adopted, may reasonably be expected to enable the multiemployer plan to meet the requirements of paragraph (3), including —

"(i) one default proposal under which —

"(I) all adjustable benefits in the form of early retirement subsidies (including early reduction factors which are not provided on an actuarially equivalent basis) under the plan are eliminated, and

"(II) the future monthly benefit accrual rate under the plan is reduced to the equivalent of 1 percent of annual contributions (or, if lower, the current accrual rate) based on the contribution rate in effect as of the later of the first day of the plan year in which the plan enters declining status or the date of a partition under section 4233A of the Employee Retirement Income Security Act of 1974, and which may also include reduction or elimination of any other adjustable benefits under the plan, and

"(ii) any additional schedules which reduce or eliminate adjustable benefits under the plan which the plan sponsor

deems appropriate to provide as an alternative to the default proposal.

No schedule provided to or adopted by the bargaining parties shall provide for a monthly benefit accrual rate in excess of the rate described in subparagraph (B)(i)(II).

"(2) EXCEPTION FOR YEARS AFTER PROCESS BEGINS. — Paragraph (1) shall not apply to a plan year if such year is in a solvency plan adoption period or solvency attainment period by reason of the plan being in declining status for a preceding plan year, except that the next update of the solvency plan shall fulfill the requirement of paragraph (1)(B)(i). For purposes of this section, such preceding plan year shall be the initial determination year with respect to the solvency plan to which it relates.

"(3) SOLVENCY PLAN. — For purposes of this section, a solvency plan is a plan which consists of the actions, including options or a range of options to be proposed to the bargaining parties, formulated, based on reasonably anticipated experience and reasonable actuarial assumptions, to enable the plan to delay or avoid the projected insolvency.

"(4) SOLVENCY ATTAINMENT PERIOD. — For purposes of this section —

"(A) IN GENERAL. — Except as provided in subparagraph (B), the solvency attainment period for any solvency plan adopted pursuant to this subsection is the period —

"(i) beginning on the first day of the first plan year of the multiemployer plan beginning after the earlier of —

"(I) the second anniversary of the date of the adoption of the solvency plan, or

"(II) the expiration of the collective bargaining agreements in effect on the due date for the actuarial certification of declining status for the initial determination year under subsection (b)(5)(A) and covering, as of such due date, at least 75 percent of the active participants in such plan, and

"(ii) ending on the date the plan either emerges from declining status or becomes insolvent.

"(B) COORDINATION WITH CHANGES IN STATUS. —

"(i) PLANS NO LONGER IN DECLINING STATUS. — If the plan's actuary certifies in accordance with subparagraph (C) for a plan year in any solvency plan adoption period or solvency attainment period that the plan is no longer in declining status, the solvency plan adoption period or solvency attainment period, whichever is applicable, shall end as of the date of such certification.

"(ii) PLANS IN CRITICAL OR ENDANGERED STATUS. — If the plan's actuary certifies under subsection (b)(5)(A) for the plan year described in clause (i) that the plan is in critical or endangered rather than declining status, the provisions of subsections (d) and (e), or subsections (f) and (g), whichever are applicable, shall be applied as if such plan year were an initial determination year, except that the plan may not be amended in a manner inconsistent with the solvency plan in effect for the preceding plan year until a new funding improvement plan or rehabilitation plan, whichever is applicable, is adopted.

"(C) EMERGENCE. — A plan in declining status shall remain in such status until a plan year for which the plan actuary certifies, in accordance with subsection (b)(5)(A), that the plan is not described in one or more of the subparagraphs in subsection (b)(4) as of the beginning of the plan year.

"(5) UPDATES TO SOLVENCY PLANS AND SCHEDULES. —

"(A) SOLVENCY PLAN. — The plan sponsor shall annually update the solvency plan and shall file the update with the plan's annual report under section 104 of the Employee Retirement Income Security Act of 1974.

"(B) SCHEDULES. — The plan sponsor shall annually update any schedule of contribution rates provided under this subsection to reflect the experience of the plan.

"(C) DURATION OF SCHEDULE. — A schedule of contribution rates provided by the plan sponsor and relied upon by bargaining parties in negotiating a collective bargaining agreement shall remain in effect for the duration of that collective bargaining agreement.

"(6) IMPOSITION OF SCHEDULE WHERE FAILURE TO ADOPT SOLVENCY PLAN. —

"(A) INITIAL CONTRIBUTION SCHEDULE. — If —

"(i) a collective bargaining agreement providing for contributions under a multiemployer plan that was in effect at the time the plan entered declining status expires, and

"(ii) after receiving one or more schedules from the plan sponsor under paragraph (1)(B), the bargaining parties with respect to such agreement fail to adopt a contribution schedule with terms consistent with the solvency plan and a schedule from the plan sponsor,

the plan sponsor shall implement the schedule described in paragraph (1)(B)(i) beginning on the date specified in subparagraph (C).

"(B) SUBSEQUENT CONTRIBUTION SCHEDULE. — If —

"(i) a collective bargaining agreement providing for contributions under a multiemployer plan in accordance with a schedule provided by the plan sponsor pursuant to a solvency plan (or imposed under subparagraph (A)) expires while the plan is still in declining status, and

"(ii) after receiving one or more updated schedules from the plan sponsor under paragraph (5)(B), the bargaining parties with respect to such agreement fail to adopt a contribution schedule with terms consistent with the updated solvency plan and a schedule from the plan sponsor,

then the contribution schedule applicable under the expired collective bargaining agreement, as updated and in effect on the date the collective bargaining agreement expires, shall be implemented by the plan sponsor beginning on the date specified in subparagraph (C).

"(C) DATE OF IMPLEMENTATION. — The date specified in this subparagraph is the date which is 180 days after the date on which the collective bargaining agreement described in subparagraph (A) or (B) expires.

"(7) SOLVENCY PLAN ADOPTION PERIOD. — For purposes of this section, the term 'solvency plan adoption period' means the period beginning on the date of the certification under subsection (b)(5)(A) for the initial determination year and ending on the day before the first day of the solvency attainment period.

"(i) RULES FOR OPERATION OF PLAN DURING ADOPTION AND ATTAINMENT PERIODS. —

"(1) COMPLIANCE WITH SOLVENCY PLAN. —

"(A) IN GENERAL. — A plan may not be amended after the date of the adoption of a solvency plan under subsection (h) so as to be inconsistent with the solvency plan.

"(B) SPECIAL RULES FOR BENEFIT INCREASES. — A plan may not be amended after the date of the adoption of a solvency plan under subsection (h) so as to increase benefits, including future benefit accruals, unless the increase is required by law or is a de minimis change.

"(C) SPECIAL RULES FOR INCREASES IN COMPENSATION OR CONTRIBUTION RATE. — Any increase in employee compensation or contribution rates which takes effect after the first day of the plan year in which the plan enters declining status shall not give rise to an increase in benefits or future benefit accruals under the plan.

"(2) RESTRICTION ON LUMP SUMS AND SIMILAR BENEFITS. —

"(A) IN GENERAL. — Effective on the date the notice of certification of the plan's declining status for the initial determination year under subsection (b)(5)(D) is sent, and notwithstanding section 411(d)(6), the plan shall not pay —

"(i) any payment, in excess of the monthly amount paid under a single life annuity (plus any social security supplements described in the last sentence of section 411(a)(9)), to a participant or beneficiary whose annuity starting date (as defined in section 417(f)(2)) occurs after the date such notice is sent,

"(ii) any payment for the purchase of an irrevocable commitment from an insurer to pay benefits, or

"(iii) any other payment specified by the Secretary by regulations, unless it is a de minimis amount.

"(B) EXCEPTION. — Subparagraph (A) shall not apply to a benefit which under section 411(a)(11) may be immediately distributed without the consent of the participant or to any makeup payment in the case of a retroactive annuity starting date or any similar payment of benefits owed with respect to a prior period.

"(3) SPECIAL RULES FOR PLAN ADOPTION PERIOD. — During the period beginning on the date of the certification under subsection (b)(5)(A) for the initial determination year and ending on the date of the adoption of a solvency plan —

"(A) the plan sponsor may not accept a collective bargaining agreement or participation agreement with respect to the multiemployer plan that provides for —

"(i) a reduction in the level of contributions for any participants,

"(ii) a suspension of contributions with respect to any period of service, or

"(iii) any new direct or indirect exclusion of younger or newly hired employees from plan participation, unless the plan sponsor reasonably determines that the acceptance of such an agreement is in the best interests of participants and beneficiaries and that rejection of such agreement would adversely affect the plan, and

"(B) no amendment of the plan which increases the liabilities of the plan 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 may be adopted unless the amendment is required as a condition of qualification under part I of subchapter D of chapter 1 or to comply with other applicable law.".

(C) SUSPENSION OF BENEFITS. — Section 432 of such Code, as amended by this section, is further amended —

(i) by redesignating paragraph (9) of subsection (f) (as redesignated by subsection (a)(2)) as paragraph (8) of subsection (h) (as added by subparagraph (B)), and

(ii) by moving such paragraph to the position immediately after paragraph (7) of such subsection (h).

(4) CONFORMING AMENDMENTS. —

(A) Subsection (a)(4)(D) of section 432 of such Code, as redesignated and amended by the preceding provisions of this section, is further amended by striking "subsection (f)(9)" and inserting "subsection (h)(8)".

(B) Paragraph (5) of section 432(b) of such Code, as so redesignated and as amended by section 321 and the preceding provisions of this section, is further amended —

(i) by striking "critical" in subparagraph (A)(i)(I) and inserting "critical or declining",

(ii) by striking "funding improvement or rehabilitation period" in subparagraph (A)(i)(II) and inserting "funding improvement, rehabilitation, or solvency attainment period",

(iii) by striking "funding improvement or rehabilitation plan" in subparagraph (A)(i)(II) and inserting "funding improvement, rehabilitation, or solvency plan",

(iv) by striking "endangered or critical" in subparagraph (A)(i)(V)(bb) and inserting "endangered, critical, or declining",

(v) by striking "funding improvement plan or rehabilitation" in subparagraph (A)(iv) and inserting "funding improvement, rehabilitation, or solvency",

(vi) by striking "critical" each place it appears in subparagraph (A)(vi) and inserting "critical or declining",

(vii) by striking "rehabilitation period" in subparagraph (A)(vi) and inserting "rehabilitation or solvency attainment period",

(viii) by striking "as described in subsection (f)(9)" in subparagraph (B)(v),

(ix) by inserting "if the plan is already in a rehabilitation period, and" before "if reasonable" in subparagraph (B)(v)(I),

(x) by striking "subsection (f)(9)" in subparagraph (B)(v)(II) and inserting "subsection (h)(8)",

(xi) by striking "endangered or critical" both places it appears in subparagraph (D)(i) and inserting "endangered, critical, or declining",

(xii) by striking "ENDANGERED OR CRITICAL" in the heading of subparagraph (D)(ii) and inserting "ENDANGERED, CRITICAL, OR DECLINING",

(xiii) by striking "endangered or critical" in subparagraph (D)(ii) and inserting "endangered, critical, or declining",

(xiv) by striking "funding improvement or rehabilitation plan" both places it appears in subclauses (I) and (II) of subparagraph (D)(ii) and inserting "funding improvement, rehabilitation, or solvency plan", and

(xv) by adding at the end of subparagraph (D) the following new clause:

"(vii) NOTICE OF PROJECTION TO BE IN DECLINING STATUS IN A FUTURE PLAN YEAR. — In any case in which it is certified under subparagraph (A)(i) that a multiemployer plan will be in declining status for any of 5 succeeding plan years (but not for the current plan year), the plan sponsor shall, not later than 30 days after the date of the certification, provide notification of the projected declining status to the Pension Benefit Guaranty Corporation.".

(C) Subparagraph (J) of section 432(h)(8) of such Code, as so redesignated and amended, is further amended —

(i) by striking "CRITICAL" in the heading and inserting "DECLINING", and

(ii) by striking "shall not emerge from critical status under paragraph (4)(B)," and inserting "shall not emerge from declining status".

(D) Subsection (j) of section 432 of such Code, as so redesignated and amended, is further amended —

(i) by striking "(f)(8) or (g)" in paragraph (1) and inserting "(f)(8), (g), or (i)",

(ii) by striking "subsection (f)(9)" in paragraph (1) and inserting "subsection (h)(8)",

(iii) by striking "FUNDING IMPROVEMENT OR REHABILITATION PLAN" in the heading of paragraph (3) and inserting "FUNDING IMPROVEMENT, REHABILITATION, OR SOLVENCY",

(iv) by striking "funding improvement plan or rehabilitation plan" both places it appears in subparagraphs (A) and (B) of paragraph (3) and inserting "funding improvement, rehabilitation, or solvency plan",

(v) by striking "ENDANGERED OR CRITICAL" in the heading of paragraph (4), as amended by subsection (a), and inserting "ENDANGERED, CRITICAL, OR DECLINING",

(vi) by striking "endangered or critical" each place it appears in paragraph (4), as so amended, and inserting "endangered, critical, or declining", and

(vii) by striking "critical or endangered" in paragraph (4) and inserting "endangered, critical, or declining".

(E) Subsection (k) of section 432 of such Code, as so redesignated and amended, is further amended —

(i) by striking "or a rehabilitation plan under subsection (f)" and inserting ", a rehabilitation plan under subsection (f), or a solvency plan under subsection (h)",

(ii) by striking "endangered status or a plan in critical status" and inserting "endangered, critical, or declining status",

(iii) by striking "has not agreed on a funding improvement plan or rehabilitation plan" and inserting "has not agreed on a funding improvement, rehabilitation, or solvency plan (whichever is applicable)", and

(iv) by striking "adoption of a funding improvement plan or rehabilitation plan" and inserting "adoption of a funding improvement, rehabilitation, or solvency plan".

(F) Subsection (l) of section 432 of such Code, as so redesignated and amended, is further amended —

(i) by striking "endangered status or in critical status" in paragraph (1) and inserting "endangered, critical, or declining status",

(ii) by striking "endangered or critical" in paragraph (1) and inserting "endangered, critical, or declining", and

(iii) by striking "(d) and (f)" in paragraph (2) and inserting "(d), (f), and (h)".

(G) Section 418E of such Code, as amended by section 112 and this section, is further amended —

(i) by striking "432(b)(3)" each place it appears in subsections (c)(1), (c)(2), (d)(1), and (d)(2) and inserting "432(b)(3), or a plan in declining status, as described in section 432(b)(4)", and

(ii) by striking "432(f)(9)" in subsection (g) and inserting "432(h)(8)".

(H) Section 4971(g) of such Code, as amended by this section, is further amended —

(i) by striking "ENDANGERED OR CRITICAL" in the heading and inserting "ENDANGERED, CRITICAL, OR DECLINING",

(ii) by striking "critical status" in paragraph (1)(A) and inserting "critical or declining status",

(iii) by striking "OR REHABILITATION PLAN" in the heading of paragraph (2) and inserting ", REHABILITATION, OR SOLVENCY PLAN",

(iv) by striking "plan or rehabilitation plan" in paragraph (2)(A) and inserting ", rehabilitation, or solvency plan",

(v) by striking "rehabilitation plan" in paragraph (2)(C) and inserting "funding improvement, rehabilitation, or solvency plan",

(vi) by striking paragraph (3) and redesignating paragraphs (4), (5), and (6) as paragraphs (3), (4), and (5), respectively,

(vii) by striking "REHABILITATION PLAN" in the heading of paragraph (3), as so redesignated, and inserting "REHABILITATION OR SOLVENCY PLAN",

(viii) by striking "critical status" in paragraph (3)(A), as so redesignated, and inserting "critical or declining status",

(ix) by striking "rehabilitation plan" in paragraph (3)(A), as so redesignated, and inserting "rehabilitation or solvency plan",

(x) by striking "described in section 432(f)(1)(A) and ending on the day on which the rehabilitation plan is adopted" in paragraph (3)(B)(ii), as so redesignated, and inserting "described in section 432(f)(1)(A) or 432(h)(1)(A), whichever is applicable, and ending on the day on which the rehabilitation plan or solvency plan is adopted",

(xi) by striking "432(k)(9)" in paragraph (3)(C)(ii), as so redesignated, and inserting "432(n)(9)", and

(xii) by striking "or (3)" in paragraph (4), as so redesignated.

(e) ADJUSTMENT OF BENEFITS. —

(1) IN GENERAL. — Section 432 of the Internal Revenue Code of 1986, as amended by this section, is further amended —

(A) by further redesignating subsections

(m) and (n), as redesignated by subsection (d), as subsections (n) and (o), respectively,

(B) by redesignating paragraph (8) of subsection (f), as redesignated by subsection (a)(2), as subsection (m), and

(C) by moving such subsection to the position immediately after subsection (l).

(2) CLERICAL AND CONFORMING AMENDMENTS. —

(A) The heading of subsection (m) of section 432 of such Code, as redesignated by paragraph (1), is amended to read as follows:

"(m) ADJUSTMENT OF BENEFITS. — ".

(B) The following provisions of such subsection (m) are amended as follows:

(i) Subparagraphs (A), (B), and (C) are redesignated as paragraphs (1), (2), and (4), respectively, and moved 2 ems to the left.

(ii) Clauses (i), (ii), (iii), and (iv) of paragraph (1) (as so redesignated) are redesignated as subparagraphs (A), (B), (C), and (D), respectively, and moved 2 ems to the left.

(iii) Subclauses (I), (II), and (III) of paragraph (1)(D) (as so redesignated) are redesignated as clauses (i), (ii), and (iii), respectively, and moved 2 ems to the left.

(iv) Clauses (i), (ii), and (iii) of paragraph (4) (as so redesignated) are redesignated as subparagraphs (A), (B), and (C), respectively, and moved 2 ems to the left, and the flush sentence at the end of subparagraph (C) (as so redesignated) is moved 2 ems to the left.

(v) Subclauses (I), (II), and (III) of paragraph (4)(A) (as so redesignated) are redesignated as clauses (i), (ii), and (iii), respectively, and moved 2 ems to the left.

(vi) Subclauses (I) and (II) of paragraph (4)(B) (as so redesignated) are redesignated as clauses (i) and (ii), respectively, and moved 2 ems to the left.

(vii) Subclauses (I), (II), and (III) of paragraph (4)(C) (as so redesignated) are redesignated as clauses (i), (ii), and (iii), respectively, and moved 2 ems to the left.

(viii) Paragraph (1)(A), as so redesignated, is amended by striking "subparagraph (C)" and inserting "paragraph (4)".

(ix) Paragraph (1)(B), as so redesignated, is amended by striking "clause (iv)(III)" and inserting "subparagraph (D)(iii)".

(x) Paragraph (1)(D), as so redesignated, is amended by striking "this paragraph" and inserting "this subsection".

(xi) Paragraph (2), as so redesignated, is amended —

(I) by striking "subparagraph (A)(iv)(III)" and inserting "paragraph (1)(D)(iii)", and

(II) by striking "this paragraph" and inserting "this subsection"

(xii) Paragraph (4)(A), as so redesignated, is amended by striking "subparagraph (A)" and inserting "paragraph (1)".

(xiii) Paragraphs (4)(B) and (4)(C), as so redesignated, are each amended by striking "clause (i)" each place it appears and inserting "subparagraph (A)".

(xiv) The last sentence of paragraph (4)(C), as so redesignated, is amended —

(I) by striking "subclause (I)" and inserting "clause (i)", and

(II) by striking "this subparagraph" and inserting "this paragraph".

(3) APPLICATION TO ALL PLANS IN ENDANGERED, CRITICAL, OR DECLINING STATUS. —

(A) IN GENERAL. — Subparagraph (A) of section 432(m)(1) of such Code, as redesignated and amended by this section, is further amended —

(i) by striking "the plan sponsor shall" and inserting "the plan sponsor of a multiemployer plan in endangered, critical, or declining status may", and

(ii) by striking "paragraph (1)(B)(i)" and inserting "subsection (d)(1)(B), (f)(1)(B), or (h)(1)(B), whichever is applicable".

(B) CONFORMING AMENDMENT. — Subparagraph (B) of section 432(m)(1) of such Code, as redesignated and amended by this section, is further amended by striking "critical" both places it appears and inserting "endangered, critical, or declining".

(4) ADDITIONAL ADJUSTABLE BENEFITS. —

(A) IN GENERAL. — Subparagraph (D) of section 432(m)(1) of such Code, as redesignated by this section, is amended —

(i) by inserting ", including early reduction factors which are not provided on an actuarially equivalent basis," after

"(i))" in clause (ii), as so redesignated,

(ii) by striking "and" at the end of clause (ii) (as so redesignated),

(iii) by striking "that would not be eligible" and all that follows through the period in clause (iii) (as so redesignated) and inserting "which were adopted (or, if later, took effect) less than 120 months before the first day of the first plan year in which the plan was in endangered, critical, or declining status,", and

(iv) by adding at the end the following new clauses:

"(iv) any one-time bonus payment or 'thirteenth check' provision, and

"(v) benefits granted for periods of service prior to participation in the plan.".

(B) CONFORMING AMENDMENTS. —

(i) Subparagraph (B) of section 432(m)(1) of such Code, as redesignated and amended by this section, is further amended by striking "subparagraph (D)(iii)" and inserting "clause (iii), (iv), or

(v) of subparagraph (D)".

(ii) Paragraph (2) of section 432(m) of such Code, as amended by paragraph (2)(B), is further amended by striking "paragraph (1)(D)(iii)" and inserting "clause (iii), (iv), or (v) of paragraph (1)(D)".

(5) RULES RELATING TO SUSPENSION OF BENEFITS UPON RETURN TO WORK. — Subsection (m) of section 432 of such Code, as redesignated and amended by this section, is further amended by inserting after paragraph (2) the following new paragraph:

"(3) RULES RELATING TO SUSPENSION OF BENEFITS UPON RETURN TO WORK. — The plan sponsor of a multiemployer plan in endangered, critical, or declining status may amend rules regarding the suspension of a participant's benefits upon a return to work after commencement of benefits, or the commencement of benefits after normal retirement age (including in the case of continued employment after normal retirement age). Any such changes shall apply only to future payments of benefits.".

(6) ADDITIONAL CONFORMING AMENDMENTS. —

(A) Clause (iii) of section 432(b)(5)(D) of such Code, as redesignated and amended by this section, is further amended —

(i) by striking "CRITICAL" in the heading and inserting "ENDANGERED, CRITICAL, OR DECLINING",

(ii) by striking "critical status" both places it appears and inserting "endangered, critical, or declining status", and

(iii) by striking "subsection (f)(8)" in subclause (I) and inserting "subsection (m)(1)(D)".

(B) Subsection (j) of section 432 of such Code, as amended by subsection (d), is further amended by striking "(f)(8), (g), or (i)" and inserting "(e), (g), (i), or (m)".

(f) ELECTIONS TO BE IN CRITICAL OR ENDANGERED STATUS. —

(1) IN GENERAL. — Paragraph (6) of section 432(b) of the Internal Revenue Code of 1986, as redesignated and amended by this section, is further amended —

(A) by striking "is not in critical status" in subparagraph (A) and inserting "is not in critical or declining status",

(B) by striking "but that is projected" in subparagraph (A) and inserting "but —

"(i) that is projected",

(C) by striking "5 plan years may, not later than" in subparagraph (A) and inserting "5 plan years, or

"(ii) that is in endangered status and is not reasonably projected to be able to emerge from endangered status within the funding improvement period under the funding improvement plan in effect, may, not later than", and

(D) by striking "under paragraph (3)" in subparagraph (B) and inserting "under paragraph (3) or for endangered status under paragraph (2)".

(2) ELECTION TO BE IN ENDANGERED STATUS. — Subsection (b) of section 432 of such Code, as so redesignated and amended, is further amended by adding at the end the following new paragraph:

"(8) ELECTION TO BE IN ENDANGERED STATUS. — Notwithstanding paragraph (2) —

"(A) the plan sponsor of a multiemployer plan that is not in endangered, critical, or declining status for a plan year but that is projected by the plan actuary, pursuant to the determination under paragraph (5), to be in endangered status in any of the 5 succeeding plan years, may, not later than 30 days after the date of the certification under paragraph (5)(A), elect to be in endangered status effective for the current plan year,

"(B) the plan year in which the plan sponsor elects to be in endangered status under subparagraph (A) shall be treated for purposes of this section as the first year in which the plan is in endangered status, regardless of the date on which the plan first satisfies the criteria for endangered status under paragraph (2), and

"(C) a plan that is in endangered status under this paragraph shall not emerge from endangered status unless the plan's actuary certifies under paragraph (5)(A) that the plan is no longer in endangered status and is not in critical or declining status.".

(g) AMENDMENTS RELATING TO FUNDING IMPROVEMENT PLAN. —

(1) IN GENERAL. — Paragraph (1) of section 432(d) of the Internal Revenue Code of 1986, as redesignated and amended by this section, is further amended —

(A) by striking the last sentence, and

(B) in subparagraph (B), by striking "funding improvement plan — " and all that follows and inserting "funding improvement plan, shall provide to the bargaining parties 1 or more schedules showing revised benefit structures, revised contribution structures, or both, which, if adopted, may reasonably be expected to enable the multiemployer plan to meet the requirements of paragraph (3), including —

"(i) one default proposal under which —

"(I) all adjustable benefits in the form of early retirement subsidies (including early reduction factors which are not provided on an actuarially equivalent basis) under the plan are eliminated, and

"(II) the future monthly benefit accrual rate under the plan is reduced to the equivalent of 1 percent of annual contributions (or, if lower, the accrual rate as of the date of the enactment of the Chris Allen Multiemployer Pension Recapitalization and Reform Act of 2021) based on the contribution rate in effect as of the first day of the plan year in which the plan enters endangered status, and which may also include reduction or elimination of any other adjustable benefits under the plan, and

"(ii) any additional schedules which reduce or eliminate adjustable benefits under the plan which the plan sponsor deems appropriate to provide as an alternative to the default proposal.".

(2) FUNDING IMPROVEMENT PLAN. — Paragraph (3) of section 432(d) of such Code, as so redesignated and amended, is further amended —

(A) by striking "For purposes of this section — " and all that follows through "which consists of" in subparagraph (A) and inserting "For purposes of this section, a funding improvement plan is a plan which consists of", and

(B) by striking "formulated to provide" and all that follows and inserting "formulated, based on reasonably anticipated experience and reasonable actuarial assumptions, to —

"(A) enable the plan to no longer be in endangered status (as certified by the plan actuary) by the end of the funding improvement period, and

"(B) avoid any accumulated funding deficiencies during the funding improvement period (taking into account any extension of amortization periods under section 431(d)).".

(3) FUNDING IMPROVEMENT PERIOD. — Paragraph (4) of section 432(d) of such Code, as so redesignated and amended, is further amended by striking subparagraph (B) and inserting after subparagraph (A) the following new subparagraph:

"(B) NEW PERIOD BASED ON ADVERSE EXPERIENCE. —

"(i) IN GENERAL. — If the plan's actuary determines necessary based on adverse plan experience, the plan sponsor may provide for a new 10-year period as of the first day of any plan year in the original funding improvement period, but only if the plan is still projected to meet the requirements of the funding improvement plan and emerge from endangered status at the end of the new funding improvement period.

"(ii) LIMITATION. — A plan sponsor may provide a new 10-year period under clause (i) not more than 1 time in any 20consecutive-year period, unless the plan sponsor submits to the Secretary an application for an additional new period. Such application shall include a certification that the plan is projected to emerge from endangered status in the proposed new 10year period and a description of key assumptions, to be specified in regulations promulgated by the Secretary in consultation with the Pension Benefit Guaranty Corporation.".

(4) CONFORMING AMENDMENTS. —

(A) Subparagraph (C) of section 432(d)(4) of such Code, as so redesignated and amended, is further amended —

(i) by striking "critical status" both places it appears in clauses (i) and (ii) and inserting "critical or declining status",

(ii) by striking "rehabilitation period" in clause (ii) and inserting "rehabilitation or solvency attainment period", and

(iii) by striking "CRITICAL STATUS" in the heading of clause (ii) and inserting "CRITICAL OR DECLINING STATUS".

(B) Subsection (d) of section 432 of such Code, as so redesignated and amended, is further amended by striking paragraph (5) and by redesignating paragraphs (6), (7), and (8) as paragraphs (5), (6), and (7), respectively.

(C) Paragraph (6) of section 432(d) of such Code, as so redesignated, is amended —

(i) by striking "(1)(B)(i)(I)" in subparagraph (A) and inserting "(1)(B)(i)", and

(ii) by striking "paragraph (6)(B)" in subparagraph (B)(ii) and inserting "paragraph (5)(B)".

(D) Paragraph (2) of section 432(d) of such Code, as so redesignated, is amended by inserting ", except that the next update of the funding improvement plan shall fulfill the requirement of paragraph (1)(B)(i)" after "for a preceding plan year".

(h) AMENDMENTS RELATING TO REHABILITATION PLAN. —

(1) IN GENERAL. — Paragraph (1) of section 432(f) of the Internal Revenue Code of 1986, as redesignated and amended by this section, is further amended —

(A) by striking the last 2 sentences, and

(B) in subparagraph (B), by striking "rehabilitation plan — " and all that follows and inserting "rehabilitation plan, shall provide to the bargaining parties 1 or more schedules showing revised benefit structures, revised contribution structures, or both, which, if adopted, may reasonably be expected to enable the multiemployer plan to meet the requirements of paragraph (3), including —

"(i) one default proposal under which —

"(I) all adjustable benefits in the form of early retirement subsidies (including early reduction factors which are not provided on an actuarially equivalent basis) under the plan are eliminated, and

"(II) the future monthly benefit accrual rate under the plan is reduced to the equivalent of 1 percent of annual contributions (or, if lower, the accrual rate as of the date of the enactment of the Chris Allen Multiemployer Pension Recapitalization and Reform Act of 2021) based on the contribution rate in effect as of the first day of the plan year in which the plan enters critical status, and which may also include reduction or elimination of any other adjustable benefits under the plan, and

"(ii) any additional schedules which reduce or eliminate adjustable benefits under the plan which the plan sponsor deems appropriate to provide as an alternative to the default proposal.

In the case of a plan adopting a rehabilitation plan described in paragraph (3)(A)(ii), no schedule provided to or adopted by the bargaining parties shall provide for a monthly benefit accrual rate in excess of the rate described in subparagraph (B)(i)(II).".

(2) REHABILITATION PLAN. —

(A) IN GENERAL. — Subparagraph (A) of section 432(f)(3) of such Code, as so redesignated, is amended —

(i) by striking "and may include" and all that follows through "such actions" in clause (i),

(ii) by inserting ", while delaying insolvency for as long as possible and maximizing the income of the plan, including income after insolvency" before the period in clause (ii), and

(iii) by striking "(1)(B)(i)" in the last sentence and inserting "(1)(B)".

(B) CONFORMING AMENDMENTS. — Clause (i) of section 432(f)(3)(C) of such Code, as so redesignated, is amended —

(i) by striking "(1)(B)(i)" in subclause (II) and inserting "(1)(B)", and

(ii) by striking "the last sentence of paragraph (1)" and inserting "paragraph (1)(B)(i)".

(3) REHABILITATION PERIOD. —

(A) IN GENERAL. — Subparagraph (A) of section 432(f)(4) of such Code, as so redesignated and amended, is further amended —

(i) by striking "The rehabilitation period" and inserting "Except as otherwise provided in this subparagraph, the rehabilitation period", and

(ii) by adding at the end the following: "If, upon exhaustion of all reasonable measures, the plan is not reasonably expected to emerge from critical status by the end of such 10-year period, the rehabilitation period shall be extended to take into account the projected date of emergence from critical status (if the rehabilitation plan remained in effect until such date) or the projected date of insolvency (if applicable) (unless the plan enters declining status).".

(B) EMERGENCE FROM CRITICAL STATUS. — Subparagraph (B) of section 432(f)(4) of such Code, as so redesignated and amended, is further amended —

(i) by inserting "and is not in declining status," after the comma in clause (i)(I),

(ii) by striking subclause (III) of clause (i) and inserting the following:

"(III) the plan's projected funded percentage as of the first day of the 15th succeeding plan year is at least 100 percent and is projected to increase after such date.",

(iii) by striking "that — " and all that follows through "regardless of whether" in clause (ii)(I) and inserting "that the plan meets the requirements of subclauses (II) and (III) of clause (i), regardless of whether", and

(iv) by striking "unless — " and all that follows in clause (ii)(II) and inserting "unless, as of such plan year, the plan fails to meet the requirements of subclause (II) or (III) of clause (i).".

(4) RULES RELATING TO BENEFIT INCREASES DURING REHABILITATION PERIOD. — Subparagraph (B) of section 432(g)(1) of such Code, as so redesignated and amended, is further amended by striking "unless" and all that follows and inserting "unless the amendment is required as a condition of qualification under part I of subchapter D of chapter 1 or to comply with other applicable law, or the amendment provides for only a de minimis increase in the liabilities of the plan.".

(5) CONFORMING AMENDMENTS. —

(A) Paragraph (6) of section 432(f) of such Code, as so redesignated, is amended by striking "the last sentence of paragraph (1)" and inserting "paragraph (1)(B)(i)".

(B) Paragraph (2) of section 432(f) of such Code, as so redesignated, is amended by inserting ", except that the next update of the rehabilitation plan shall fulfill the requirement of paragraph (1)(B)(i)" after "for a preceding plan year".

(i) ACTUARIAL ASSUMPTIONS. —

(1) IN GENERAL. — Subsection (n) of section 432 of the Internal Revenue Code of 1986, as redesignated by subsections (a), (d), and (e), is amended —

(A) by striking "METHOD" in the heading and inserting "METHOD AND ASSUMPTIONS", and

(B) by adding at the end the following new paragraph:

"(11) ACTUARIAL ASSUMPTIONS. —

"(A) IN GENERAL. — The actuarial assumptions relied upon for purposes of this section by a plan actuary shall be individually reasonable and, in the aggregate, shall be reasonable and (with the exception of assumptions regarding future contributions) represent the actuary's best estimate of future plan experience, within limitations prescribed by the Secretary. A plan actuary shall avoid conservatism or optimism in individual assumptions to the extent that they would result in a set of assumptions that is unreasonable in the aggregate.

"(B) INVESTMENT RETURNS. — The investment return assumption for projecting plan assets may differ from the actuarial valuation interest rate. In selecting the investment return assumption for projecting plan assets, the plan actuary shall estimate the expected return of the plan's investments as currently invested and as expected to be invested in the future, consistent with the plan's adopted investment policy, if applicable. It is reasonable for an actuary to expect that the plan's investment decisions will consider risk, expected returns over time, and expected future benefit payments. The investment return assumption shall not exceed the interest rate used to determine past service liability under section 431(b)(6).

"(C) CONTRIBUTIONS. —

"(i) IN GENERAL. — The plan actuary shall develop assumptions for the projection of future contributions, including assumptions regarding industry activity among contributing employers and contribution rates, based on information provided by the plan sponsor, which must act reasonably and in good faith. The plan actuary shall certify the reasonableness of all assumptions.

"(ii) PROJECTED INDUSTRY ACTIVITY. — Any projection of activity in the industry or industries covered by the plan, including future covered employment and contribution levels, shall be based on information provided by the plan sponsor acting reasonably and in good faith.

"(iii) FUTURE CONTRIBUTION BASE UNITS. —

"(I) DECLINING CONTRIBUTION BASE UNITS. — If recent experience of the plan has been declining contribution base units, the plan actuary may assume future contribution base units will continue to decline at the same annualized trend as over the 5 immediately preceding plan years, unless the actuary determines that there have been significant changes that would make such assumption unreasonable.

"(II) FLAT OR INCREASING CONTRIBUTION BASE UNITS. — If recent experience of the plan has been increasing, or neither increasing nor decreasing, contribution base units, the plan actuary may assume future contribution base units will remain unchanged indefinitely, unless the actuary determines that there have been significant changes that would make such assumption unreasonable.

"(iv) FUTURE CONTRIBUTION RATES. —

"(I) IN GENERAL. — Projections of contributions shall be based on the contribution rates consistent with the terms of collective bargaining and participation agreements currently in effect.

"(II) FUTURE INCREASES IN ACCORDANCE WITH CORRECTION PLANS. — If reasonable and applicable, the plan actuary may assume future increases in contribution rates consistent with the adopted funding improvement plan, rehabilitation plan, or solvency plan.

"(III) ADDITIONAL FACTORS. — Information provided by the plan sponsor to the plan actuary in setting the assumption regarding future increases in contribution rates shall take into account the ability of the participating employers to make contributions at the scheduled rates over time, considering relevant factors such as projected industry activity, the financial strength of participating employers, market competition, and the scheduled contribution rate to the plan relative to the overall wage package.

"(D) ASSUMPTIONS FOR DEVELOPING SCHEDULES. — All schedules under any funding improvement plan, rehabilitation plan, or solvency plan must be developed based on the same set of actuarial assumptions unless it would be unreasonable to do so, taking into account the anticipated impact of the schedules on participant behavior and employer participation.".

(2) ADDITIONS TO FORM 5500 SCHEDULE MB. — Subparagraph (B) of section 432(b)(5) of such Code, as redesignated and amended by this section, is further amended by adding at the end the following new clause:

"(vi) ADDITIONAL ATTACHMENTS. — The plan actuary shall attach to the certification required under subparagraph (A) —

"(I) documentation supporting the certification of status under subparagraph (A), including projections of the funding standard account, funded percentage, and solvency of the plan,

"(II) a clear description of the key assumptions used in performing the projections, including investment returns, contribution base units, and contribution rates,

"(III) a 5-year history of contributions, including contribution base units, average contribution rates, and withdrawal liability payments, and a comparison of such contribution base units, rates, and payments to projections made by the plan, and

"(IV) an alternate projection of the funding standard account, funded percentage, and solvency, based on the following assumptions:

"(aa) Annual future investment returns on plan assets equal the actuarial interest rate assumption minus 1 percent.

"(bb) Future contribution base units projected using a trend equal to the lesser of —

"(AA) the annualized trend of actual contribution base units over the 5 preceding plan years, and

"(BB) no change in future contribution base units.

"(cc) No increases in future contribution rates beyond those consistent with the collective bargaining agreements and participation agreements in effect for the plan year.

"(dd) The withdrawal from the plan of the employer which has contributed the greatest total amount of contributions over the 5 preceding plan years, if such employer has contributed at least 10 percent of the total contributions to the plan over such 5 plan years and such employer has a below investment grade credit rating (but only if obtaining the credit rating of such employer is not an undue burden).

"(ee) If such credit rating cannot be obtained without undue burden, the withdrawal of the employer which has contributed the greatest total amount of contributions over the 5 preceding plan years, if such employer has contributed at least 10 percent of the total contributions to the plan over such 5 plan years without regard to collection of any withdrawal liability.

"(ff) If no employer has contributed at least 10 percent of the total contributions to the plan over the 5 preceding plan years, the withdrawal of the employer which contributed the greatest total amount of contribution for the current plan year, without regard to collection of any withdrawal liability, unless the employer contributed less than 1 percent of the total contributions to the plan for such plan year.

"(gg) Other assumptions consistent with the projection based on the actuary's best estimate assumptions.".

(3) CONFORMING AMENDMENTS. —

(A) Section 432(b)(5)(B)(i) of such Code, as redesignated by this section, is amended by striking "assumptions" and inserting "assumptions meeting the requirements of subsection (n)(11)".

(B) Section 432(b)(5)(A)(vi) of such Code, as amended by this section and section 321, is further amended by striking "reasonable actuarial assumptions" and inserting "assumptions meeting the requirements of subsection (n)(11)".

(C) Paragraph (3) of section 432(d) of such Code, as amended by subsection (g), is further amended by striking "reasonable actuarial assumptions" and inserting "assumptions meeting the requirements of subsection (n)(11)".

(D) Clause (i) of section 432(f)(3)(A) of such Code, as amended by subsection (h), is further amended by striking "reasonable actuarial assumptions" and inserting "assumptions meeting the requirements of subsection (n)(11)".

(E) Section 432(h)(3) of such Code, as added by subsection (d), is amended by striking "reasonable actuarial assumptions" and inserting "assumptions meeting the requirements of subsection (n)(11)".

(j) CONFORMING AMENDMENTS RELATING TO LEGACY PLANS. —

(1) Subsections (a)(3)(F), (b)(1)(B)(i), (b)(1)(H)(iv), and (d)(6)(A) of section 411 of the Internal Revenue Code of 1986, as amended by title V, are each further amended by striking "432(f)" each place it appears and inserting "432(h)(8)".

(2) Sections 431(b)(10), 440A(d)(2)(D), and 440A(d)(4) of such Code, as added by title V, are each amended by striking "endangered or critical" and inserting "endangered, critical, or declining".

(3) Section 437(b)(1) of such Act, as so added, is amended by striking "endangered or critical" both places it appears and inserting "endangered, critical, or declining".

(4) Sections 437(b)(5)(B) and 440A(b)(1)(A) of such Code, as so added, are each amended by striking "endangered or critical" and inserting "endangered, critical, or declining".

(5) Sections 437(b)(1), 437(b)(5)(B), 440A(b)(1)(A), and 440A(e)(3) of such Code, as so added, are each amended by striking "432(b)(4)" and inserting "432(b)(5)".

(6) Sections 438(b)(5) and 440A(d)(2)(A) of such Code, as so added, are each amended by striking "432(b)(4)(B)" and inserting "432(b)(5)(B)".

(7) Section 438(b)(1) of such Code, as so added, 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 adding at the end the following new subparagraph:

"(D) consistent with the principles of subparagraphs (B), (C), and (D) of section 432(n)(11).".

(8) Section 439(a)(2)(D) of such Code, as so added, is amended by striking "432(f)(9)(D)(vi)" and inserting "432(h)(8)(D)(vi)".

(9) Section 439(a)(3) of such Code, as so added, is amended by striking "432(f)(8)" and inserting "432(m)(1)(D)".

(10) Section 440A(d)(2)(D) of such Code, as so added and amended, is further amended by striking "funding improvement or rehabilitation plan" and inserting "funding improvement, rehabilitation, or solvency plan".

(k) EFFECTIVE DATE. — Except as otherwise provided in subsection (a)(7), the amendments made by this section shall apply to plan years beginning after December 31, 2021.

(l) CREDIT RATINGS. — No requirement of section 939 or 939A of the Dodd-Frank Wall Street Reform and Consumer Protection Act (124 Stat. 1887; 15 U.S.C. 780-7 note) shall apply with respect to the amendment made by subsection (i)(2).

SEC. 212. AMENDMENTS TO EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974.

(a) RULES APPLYING TO ALL MULTIEMPLOYER PLANS. —

(1) IN GENERAL. — Subsection (a) of section 305 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1085) is amended —

(A) by striking "a multiemployer plan in effect on July 16, 2006 — " and inserting "any multiemployer plan — ",

(B) by redesignating paragraphs (1), (2), and (3) as paragraphs (2), (3), and (4), respectively,

(C) by inserting before paragraph (2), as so redesignated, the following new paragraph:

"(1) the rules of subsection (c) shall apply,",

(D) by striking "subsection (c)" in paragraph (2)(A), as so redesignated, and inserting "subsection (d)",

(E) by striking "subsection (d)" in paragraph (2)(B), as so redesignated, and inserting "subsection (e)",

(F) by striking "subsection (e)" in paragraph (3)(A), as so redesignated, and inserting "subsection (f)",

(G) by striking "subsection (f)" in paragraph (3)(B), as so redesignated, and inserting "subsection (g)", and

(H) by striking "subsection (e)(9)" in paragraph (4)(B), as so redesignated, and inserting "subsection (f)(9)".

(2) RULES OF IMMEDIATE APPLICATION. — Section 305 of such Act (29 U.S.C. 1085) is amended —

(A) by redesignating subsections (c), (d), (e), (f), (g), (h), (i), and (j) as subsections (d), (e), (f), (g), (h), (i), (j), and (k), respectively, and

(B) by inserting after subsection (b) the following new subsection:

"(c) RULES APPLYING TO ALL MULTIEMPLOYER PLANS. —

"(1) BENEFIT INCREASES. —

"(A) INCREASES BY PLAN AMENDMENT. — The plan sponsor of any multiemployer plan shall not adopt a plan amendment which increases plan liabilities (as determined as of the date of the adoption of the amendment) due to any increase in benefits, any change in the accrual rate of benefits, or any change in the rate at which benefits become nonforfeitable, unless —

"(i) if the plan is in unrestricted status as of the adoption of such amendment, the plan actuary certifies in accordance with subsection (b)(4) that the increase in liabilities will not cause the plan to no longer be in unrestricted status,

"(ii) if the plan is in stable status as of the adoption of such amendment, the plan actuary certifies in accordance with subsection (b)(4) that any such increase or change in benefits will be paid from additional contributions not required by any collective bargaining agreement in effect as of the adoption of the amendment,

"(iii) if the plan is in endangered status as of the adoption of such amendment, the plan actuary certifies in accordance with subsection (b)(4) that any such increase or change in benefits will be paid from additional contributions not contemplated in any current funding improvement plan, or

"(iv) the increase or change in benefits is required by law or is a de minimis change.

"(B) INCREASES UNDER CRITICAL OR CRITICAL AND DECLINING STATUS. — Unless required as a condition of qualification under part I of subchapter D of chapter 1 of the Internal Revenue Code of 1986 or to comply with other applicable law, in the case of a plan which is in critical or critical and declining status, no increase in benefits, change in the accrual rate of benefits, or change in the rate at which benefits become nonforfeitable which increases plan liabilities shall take effect while the plan is in such status, without regard to whether such increase or change would otherwise occur under the provisions of the plan, unless the increase in plan liabilities due to the change is de minimis.

"(2) CONTRIBUTION REDUCTIONS. — The plan sponsor of any multiemployer plan shall not accept any collective bargaining agreement or participation agreement which reduces the rate of contributions under the plan for any participants, suspends contributions with respect to any period of service, or directly or indirectly excludes younger, probationary, or newly hired employees from participation in the plan, unless —

"(A) the plan is in unrestricted status as of the adoption of such agreement and the plan actuary certifies in accordance with subsection (b)(4) that the reduction in contributions will not cause the plan to no longer be in unrestricted status,

"(B) the reduction in contributions is accompanied by a reduction in future accruals for the affected participants, and the plan actuary certifies in accordance with subsection (b)(4) that the combined effect of the changes in contributions and benefits is not projected to reduce the funded percentage of the plan in any year, or

"(C) subject to regulations issued by the Secretary of the Treasury, the plan sponsor reasonably determines that the acceptance of such an agreement is in the best interests of plan participants and beneficiaries and that rejection of the agreement would have an adverse financial effect on the plan.".

(3) STABLE AND UNRESTRICTED PLANS. — Subsection (b) of section 305 of such Act (29 U.S.C. 1085) is amended —

(A) by striking "ENDANGERED AND CRITICAL" in the heading,

(B) by redesignating paragraphs (1), (2), (3), (4), (5), and (6) as paragraphs (2), (3), (4), (5), (6), and (7), respectively, and

(C) by inserting before paragraph (2) the following new paragraph:

"(1) STABLE AND UNRESTRICTED STATUS. —

"(A) STABLE. — A multiemployer plan is in stable status for a plan year if, as determined by the plan actuary under paragraph (4), the plan is not in unrestricted status for the plan year, is not in endangered, critical, or critical and declining status for the plan year, and is not described in paragraph (6).

"(B) UNRESTRICTED. — A multiemployer plan is in unrestricted status for a plan year if, as determined by the plan actuary under paragraph (4) —

"(i) the plan is not in endangered, critical, or critical and declining status for the plan year,

"(ii) the plan is not described in paragraph (6), and

"(iii) as of the beginning of the plan year —

"(I) the plan's current liability funded percentage for such plan year is at least 70 percent and the plan's projected funded percentage as of the first day of the 15th succeeding plan year is at least 115 percent, or

"(II) the plan's current liability funded percentage for such plan year is at least 80 percent.

"(C) CURRENT LIABILITY FUNDED PERCENTAGE. — For purposes of this section, the term 'current liability funded percentage' means the percentage equal to a fraction the numerator of which is the value of plan assets (as determined for purposes of section 304(c)(6)(A)(ii)(II)) and the denominator of which is the current liabilities of the plan (as defined in section 304(c)(6)(D)).".

(4) AMENDMENT TO ANNUAL CERTIFICATION BY PLAN ACTUARY. — Subparagraph (A) of paragraph (4) (as redesignated by paragraph (3)) of section 305(b) of such Act (29 U.S.C. 1085(b)) is amended by inserting "whether or not the plan is in unrestricted or stable status for such plan year," in clause (i) before "whether or not the plan is in endangered status".

(5) CONFORMING AND TECHNICAL AMENDMENTS. —

(A) TECHNICAL CORRECTION. — Section 305(b)(3)(B) of such Act (29 U.S.C. 1085(b)(3)(B)) is amended by redesignating the clause (iv) relating to projections of critical and declining status, as added by section 201(a)(5) of the Consolidated and Further Continuing Appropriations Act, 2015, as clause (v), and by moving such clause to the position immediately after clause (iv).

(B) CONFORMING AMENDMENTS. —

(i) Paragraphs (2) and (3) of section 305(b) of such Act (29 U.S.C. 1085(b)), as redesignated by paragraph (3), are each amended by striking "paragraph (3)" and inserting "paragraph (4)".

(ii) Section 305(b)(2) of such Act (29 U.S.C. 1085(b)(2)), as so redesignated and amended, is further amended by striking "paragraph (5)" and inserting "paragraph (6)".

(iii) Section 305(b)(4) of such Act (29 U.S.C. 1085(b)(4)), as so redesignated, is amended —

(I) by striking "paragraph (4)" in subparagraph (B)(iv) thereof and inserting "paragraph (5)",

(II) by striking "subsection (e)(9)" both places it appears in subparagraph (B)(v), as redesignated by subparagraph (A), and inserting "subsection (f)(9)",

(III) by striking "subsection (e)(3)(A)(ii)" in subparagraph (B)(v), as so redesignated, and inserting "subsection (f)(3)(A)(ii)",

(IV) by striking "subsection (e)" in subparagraph (B)(v), as so redesignated, and inserting "subsection (f)",

(V) by striking "paragraph (4)" each place it appears in subparagraphs (D)(i) and (D)(v) thereof and inserting "paragraph (5)",

(VI) by striking "subsection (e)(8)" in subparagraph (D)(iii)(I) thereof and inserting "subsection (f)(8)",

(VII) by striking "paragraph (5)" in subparagraph (D)(iii) thereof and inserting "paragraph (6)", and

(VIII) by striking "(iii) In the case of" in subparagraph (D)(iii) thereof and inserting "(iii) SPECIAL RULE. — ".

(iv) Section 305(b)(5) of such Act (29 U.S.C. 1085(b)(5)), as redesignated by paragraph (3), is amended —

(I) by striking "paragraph (2)" and inserting "paragraph (3)",

(II) by striking "paragraph (3)(B)(iv)" and inserting "paragraph (4)(B)(iv)",

(III) by striking "paragraph (3)" in subparagraph (A) thereof and inserting "paragraph (4)",

(IV) by striking "paragraph (3)(A)" in subparagraph (A) thereof and inserting "paragraph (4)(A)",

(V) by striking "paragraph (2)" in subparagraph (B) thereof and inserting "paragraph (3)", and

(VI) by striking "subsection (e)(4)(B)" in subparagraph (C) thereof and inserting "subsection (f)(4)(B)".

(v) Section 305(b)(6)(A) of such Act (29 U.S.C. 1085(b)(6)(A)), as so redesignated, is amended —

(I) by striking "paragraph (3)(A)" and inserting "paragraph (4)(A)",

(II) by striking "paragraph (1)(A)" and inserting "paragraph (2)(A)", and

(III) by striking "paragraph (1)(B)"and inserting "paragraph (2)(B)".

(vi) Section 305(b)(7) of such Act (29 U.S.C. 1085(b)(7)), as so redesignated, is amended by striking "paragraph (2)" and inserting "paragraph (3)".

(vii) Paragraphs (1)(A), (4)(A)(ii), (4)(C)(i), (4)(C)(ii), (4)(D), (5)(A)(i), (5)(B), and (8) of subsection (d), and subsections (e)(2), (f)(1)(A), (f)(4)(B)(i), (f)(4)(B)(ii)(I), (f)(5), and (g)(3) of section 305 of such Act (29 U.S.C. 1085), as respectively redesignated by paragraph (2), are each amended by striking "subsection (b)(3)(A)" and inserting "subsection (b)(4)(A)".

(viii) Section 305(d)(3)(A)(i)(I) of such Act (29 U.S.C. 1085(d)(3)(A)(i)(I)), as so redesignated, is amended by striking "paragraph (b)(3)" and inserting "subsection (b)(4)".

(ix) Section 305(d)(4)(D) of such Act (29 U.S.C. 1085(d)(4)(D)), as so redesignated, is amended by striking "subsection (d)" and inserting "subsection (e)".

(x) Section 305(e) of such Act (29 U.S.C. 1085(e)), as so redesignated, is amended to read as follows:

"(e) RULES FOR OPERATION OF PLAN DURING ADOPTION AND IMPROVEMENT PERIODS. — A plan may not be amended after the date of the adoption of a funding improvement plan under subsection (d) so as to be inconsistent with the funding improvement plan or the requirements of subsection (c).".

(xi) Clauses (i)(I) and (ii)(I) of section 305(f)(4)(B) of such Act (29 U.S.C. 1085(f)(4)(B)), as so redesignated, are each amended by striking "subsection (b)(2)" and inserting "subsection (b)(3)".

(xii) Subsections (f)(8)(A)(ii) and (g)(2)(A) of section 305 of such Act (29 U.S.C. 1085), as so redesignated, are each amended by striking "subsection (b)(3)(D)" and inserting "subsection (b)(4)(D)".

(xiii) Section 305(f)(9)(J) of such Act (29 U.S.C. 1085(f)(9)(J)), as so redesignated, is amended —

(I) by striking "subsection (b)(3)" and inserting "subsection (b)(4)", and

(II) by striking "paragraphs (1) and (2)" in clause (i) thereof and inserting "paragraphs (2) and (3)".

(xiv) Subparagraphs (A) and (B) of section 305(g)(1) of such Act (29 U.S.C. 1085(g)(1)), as so redesignated, are each amended by striking "subsection (e)" and inserting "subsection (f)".

(xv) Paragraph (2)(A) of section 305(g) of such Act (29 U.S.C. 1085(g)), as so redesignated, is amended by striking "(b)(3)(D)" and inserting "(b)(4)(D)".

(xvi) Section 305(h) of such Act (29 U.S.C. 1085(h)), as so redesignated, is amended —

(I) by striking "subsection (e)(8) or (f)" in paragraph (1) thereof and inserting "subsection (f)(8) or (g)",

(II) by striking "subsection (e)(9)" in paragraph (1) thereof and inserting "subsection (f)(9)",

(III) by striking "subsection (e)(7)" in paragraph (2) thereof and inserting "subsection (f)(7)", and

(IV) by striking "rehabilitation plan" and all that follows in paragraph (3)(B) thereof and inserting "rehabilitation plan. The preceding sentence shall not apply to any increase in contribution requirements due to increased levels of work, employment, or periods for which compensation is provided, except to the extent such an increase is used to provide an increased accrual rate of benefits or change in the rate at which benefits become nonforfeitable which increases plan liabilities.".

(xvii) Section 305(i) of such Act (29 U.S.C. 1085(i)), as so redesignated, is amended —

(I) by striking "subsection (c)" and inserting "subsection (d)", and

(II) by striking "subsection (e)" and inserting "subsection (f)".

(xviii) Section 305(j)(2) of such Act (29 U.S.C. 1085(j)(2)), as so redesignated, is amended by striking "subsections (c) and (e)" and inserting "subsections (d) and (f)".

(xix) Section 101(f)(2)(B) of such Act (29 U.S.C. 1021(f)(2)(B)) is amended —

(I) by striking "305(i)" in clause (i)(II) and inserting "305(k)", and

(II) by striking "305(i)(8)" in clause (ii)(II) and inserting "305(k)(8)".

(xx) Section 103(f)(1)(B)(ii) of such Act (29 U.S.C. 1023(f)(1)(B)(ii)) is amended by striking "305(i)(2)" and inserting "305(k)(2)".

(xxi) Section 302(b)(3) of such Act (29 U.S.C. 1082) is amended by striking "section 305(e)" and inserting "section 305(f)".

(xxii) Section 4231(e)(2)(A) of such Act (29 U.S.C. 1411(e)(2)(A)) is amended by striking "section 305(b)(4)" and inserting "305(b)(7)".

(xxiii) Section 4233 of such Act (29 U.S.C. 1413) is amended —

(I) by striking "305(e)(9)" each place it appears in subsections (b)(2) and (e)(1)(A) and inserting "305(f)(9)", and

(II) by striking "305(e)(9)(E)(vi)" in subsection (e)(2) and inserting "305(f)(9)(E)(vi)".

(xxiv) Section 4245 of such Act (29 U.S.C. 1426), as amended by this Act, is amended —

(I) by striking "305(b)(2),," in subsection (c)(1), as redesignated by section 112, and inserting "305(b)(3),",

(II) by striking "305(b)(2)" each place it appears in subsections (c)(2), (d)(1), and (d)(2), as so redesignated, and inserting "305(b)(3)", and

(III) by striking "305(e)(9)" in subsection (f), as so redesignated, and inserting "305(f)(9)".

(xxv) The heading of section 305 of such Act (29 U.S.C. 1085) is amended by striking "IN ENDANGERED STATUS OR CRITICAL STATUS".

(6) WITHDRAWAL LIABILITY DETERMINATION FOR PLANS EMERGING FROM ENDANGERED OR CRITICAL STATUS. — Section 305(h) of such Act (29 U.S.C. 1085(h)), as redesignated by paragraph (2) and as amended by paragraph (5), is further amended by striking paragraph (4) and by inserting after paragraph (3) the following new paragraph:

"(4) EMERGENCE FROM ENDANGERED OR CRITICAL STATUS. —

"(A) IN GENERAL. — In the case of increases in the contribution rate (or other increases in contribution requirements unless due to increased levels of work, employment, or periods for which compensation is provided) disregarded pursuant to paragraph (3), this subsection shall cease to apply as of the later of —

"(i) the end of the first plan year following the plan year in which the plan is no longer in endangered or critical status, or

"(ii) the end of the plan year which includes the expiration date of the first collective bargaining agreement requiring plan contributions which expires after the plan is no longer in endangered or critical status.

"(B) HIGHEST CONTRIBUTION RATE. — Notwithstanding subparagraph (A), once the plan emerges from endangered or critical status —

"(i) increases in the contribution rate disregarded pursuant to paragraph (3) shall continue to be disregarded in determining the highest contribution rate under section 4219(c) for plan years during which the plan was in endangered or critical status, and

"(ii) the highest contribution rate for purposes of such section shall be the greater of —

"(I) the sum of —

"(aa) the employer's contribution rate as of the later of the last day of the last plan year ending before December 31, 2014, and the last day of the plan year for which the employer first had an obligation to contribute to the plan, and

"(bb) any contribution increases determined in accordance with this section after such later date and before the date the employer withdraws from the plan, or

"(II) the highest contribution rate for any plan year after the plan year which includes the earlier of —

"(aa) the expiration date of the first collective bargaining agreement applicable to the withdrawing employer requiring plan contributions which expires after the plan is no longer in endangered or critical status, or

"(bb) the date as of which the withdrawing employer negotiated a contribution rate effective after the plan year in which the plan is no longer in endangered or critical status.".

(7) EFFECTIVE DATE. — The amendments made by this subsection shall take effect on the date of the enactment of this Act.

(b) DETERMINATION OF ENDANGERED STATUS. — Paragraph (2) of section 305(b) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1085(b)), as redesignated by subsection (a)(3), is amended to read as follows:

"(2) ENDANGERED STATUS. — A multiemployer plan is in endangered status for a plan year if, as determined by the plan actuary under paragraph (5), the plan is not in critical or declining status for the plan year and is not described in paragraph (7), and, as of the beginning of the plan year —

"(A) the plan's funded percentage for such plan year is less than 80 percent,

"(B) the plan is projected to have an accumulated funding deficiency for any of the 9 succeeding plan years, taking into account any extension of amortization periods under section 304(d), or

"(C) the plan's projected funded percentage as of the first day of the 15th succeeding plan year is less than 100 percent.".

(c) DETERMINATION OF CRITICAL STATUS. — Paragraph (3) of section 305(b) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1085(b)), as redesignated by subsection (a)(3), is amended to read as follows:

"(3) CRITICAL STATUS. —

"(A) IN GENERAL. — A multiemployer plan is in critical status for a plan year if, as determined by the plan actuary under paragraph (5), the plan is not in declining status for the plan year and, as of the beginning of the plan year —

"(i) the plan's funded percentage is less than 65 percent,

"(ii) the plan has an accumulated funding deficiency for the plan year, or is projected to have such an accumulated funding deficiency for any of the 6 succeeding plan years, taking into account any extension of amortization periods under section 304(d), or

"(iii) the plan's projected funded percentage as of the first day of the 15th succeeding plan year is less than 80 percent.

"(B) ORIGINAL PLANS. — Notwithstanding subparagraph (A), a multiemployer plan which is an original plan pursuant to section 4233A(d)(3) shall be treated as being in critical status for the period of 15 consecutive plan years beginning with the plan year that includes the date of the partition under section 4233A.".

(d) DECLINING STATUS. —

(1) IN GENERAL. —

(A) The following provisions of section 305 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1085) are each amended by striking "critical and declining" each place it appears and inserting "declining":

(i) Subsection (a)(4) (as redesignated by subsection (a)(1)).

(ii) Subparagraphs (A) and (B)(i) of subsection (b)(1), as added by subsection (a)(3).

(iii) Subsection (b)(4)(B)(v) (as redesignated by subsection (a)(3)).

(iv) The heading of clause (v) of subsection (b)(4)(B), as redesignated by subsection (a)(3).

(v) Paragraph (1)(B), and the heading of such paragraph (1)(B), of subsection (c), as added by subsection (a)(2).

(vi) The heading of paragraph (9) of subsection (f) (as redesignated by subsection (a)(2)).

(vii) Subparagraphs (A), (C), (G)(i), and (J) of subsection (f)(9) (as so redesignated).

(viii) Subsection (h)(1) (as so redesignated).

(B) Subsections (c), as amended by section 221, and (e)(2)(A), as amended by this section, of section 4231 of such Act (29 U.S.C. 1411(e)(2)(A)) are each further amended by striking "critical and declining status" and inserting "declining status".

(C) Section 4233(b)(1) of such Act (29 U.S.C. 1413(b)(1)) is amended by striking "critical and declining status" and inserting "declining status".

(D) Section 4245(f) of such Act (29 U.S.C. 1426), as amended by section 112 and subsection (a), is further amended by striking "critical and declining status" and inserting "declining status".

(2) DETERMINATION OF DECLINING STATUS. —

(A) IN GENERAL. — Subsection (b) of section 305 of such Act (29 U.S.C. 1085) is amended —

(i) by striking paragraph (7), as redesignated by subsection (a)(3),

(ii) by redesignating paragraphs (4), (5), and (6), as so redesignated, as paragraphs (5), (6), and (7), respectively, and

(iii) by inserting after paragraph (3), as so redesignated, the following new paragraph:

"(4) DECLINING STATUS. — A multiemployer plan is in declining status for a plan year if —

"(A) as determined by the plan actuary under paragraph (5), as of the beginning of the plan year the plan is projected to become insolvent within the plan year or any of the 29 succeeding plan years,

"(B) the plan is otherwise in critical status for the plan year as determined by the plan actuary under paragraph (5), and the plan sponsor determines that, based on reasonable actuarial assumptions and upon exhaustion of all reasonable measures, the plan cannot reasonably be expected to emerge from critical status within the next 30 plan years, or

"(C) the plan has a funded percentage for the plan year which is greater than the projected funded percentage as of the first day of the 15th succeeding plan year, unless the funded percentage for the plan year is 100 percent or greater and the projected funded percentage as of the first day of such 15th succeeding plan year is less than 100 percent.".

(B) CONFORMING AMENDMENTS. —

(i) Paragraph (1) of section 305(b) of such Act (29 U.S.C. 1085), as added by subsection (a)(3), is amended —

(I) by striking "paragraph (4)" each place it appears in subparagraphs (A) and (B) and inserting "paragraph (5)", and

(II) by striking "paragraph (6)" each place it appears in subparagraphs (A) and (B) and inserting "paragraph (7)".

(ii) Subsection (c) of section 305 of such Act (29 U.S.C. 1085), as added by subsection (a)(2), is amended by striking "(b)(4)" each place it appears in paragraphs (1)(A)(i), (1)(A)(ii), (1)(A)(iii), (2)(A), and (2)(B) and inserting "(b)(5)".

(iii) Section 305(b)(5) of such Act (29 U.S.C. 1085(b)(5)), as further redesignated by subparagraph (A) and as amended by section 321 and subsection (a), is further amended —

(I) by striking "paragraph (5)" in subparagraph (B)(iv) thereof and inserting "paragraph (6)",

(II) by striking "paragraph (5)" each place it appears in subparagraphs (D)(i) and (D)(vi) thereof and inserting "paragraph (6)", and

(III) by striking "paragraph (6)" in subparagraph (D)(iv) thereof and inserting "paragraph (7)".

(iv) Section 305(b)(6) of such Act (29 U.S.C. 1085(b)(6)), as so further redesignated and amended, is further amended —

(I) by striking "paragraph (4)(B)(iv)" and inserting "paragraph (5)(B)(iv)",

(II) by striking "paragraph (4)" in subparagraph (A) thereof and inserting "paragraph (5)", and

(III) by striking "paragraph (4)(A)" in subparagraph (A) thereof and inserting "paragraph (5)(A)".

(v) Section 305(b)(7)(A) of such Act (29 U.S.C. 1085(b)(7)(A)), as so further redesignated and amended, is further amended —

(I) by striking "paragraph (4)(A)" and inserting "paragraph (5)(A)", and

(II) by striking "either paragraph (2)(A) or paragraph (2)(B)" and inserting "any subparagraph of paragraph (2)".

(vi) Section 305(b)(7)(B) of such Act (29 U.S.C. 1085(b)(7)(B)), as so further redesignated, is amended by striking "critical or endangered" and inserting "endangered, critical, or declining".

(vii) Paragraphs (1)(A), (4)(A)(ii), (4)(C)(i), (4)(C)(ii), (4)(D), and (8) of subsection (d), and subsections (f)(1)(A), (f)(4)(B)(i), (f)(4)(B)(ii)(I), (f)(5), and (g)(3) of section 305 of such Act (29 U.S.C. 1085), as redesignated and amended by subsection (a), are each further amended by striking "subsection (b)(4)(A)" and inserting "subsection (b)(5)(A)".

(viii) Section 305(d)(3)(A)(i)(I) of such Act (29 U.S.C. 1085(d)(3)(A)(i)(I)), as so redesignated and amended, is further amended by striking "subsection (b)(4)" and inserting "subsection (b)(5)".

(ix) Subsections (f)(8)(A)(ii) and (g)(2)(A) of section 305 of such Act (29 U.S.C. 1085), as so redesignated and amended, are each further amended by striking "subsection (b)(4)(D)" and inserting "subsection (b)(5)(D)".

(x) Section 305(f)(9)(J) of such Act (29 U.S.C. 1085(f)(9)(J)), as so redesignated and amended, is further amended by striking "subsection (b)(4)" and inserting "subsection (b)(5)".

(xi) Section 4231(e)(2)(A) of such Act (29 U.S.C. 1411(e)(2)(A)), as amended by this section, is further amended by striking "305(b)(7)" and inserting "305(b)(4)".

(3) SOLVENCY PLAN. —

(A) IN GENERAL. — Paragraph (4) (as redesignated by subsection (a)(1) and amended by paragraph (1)) of section 305(a) of such Act (29 U.S.C. 1085(a)) is amended —

(i) by redesignating subparagraph (B) as subparagraph (D), and

(ii) by striking subparagraph (A) and inserting before subparagraph (D) (as so redesignated) the following new subparagraphs:

"(A) the plan sponsor shall adopt and implement a solvency plan in accordance with the requirements of subsection (h),

"(B) any rehabilitation plan in place as of the date the plan enters declining status shall continue to apply throughout the solvency plan adoption period,

"(C) the requirements of subsection (i) and paragraphs (6) and (7) of subsection (f) shall apply during the solvency plan adoption period and the solvency attainment period, and".

(B) ADOPTION OF PLAN. — Section 305 of such Act (29 U.S.C. 1085), as amended by this section, is further amended —

(i) by redesignating subsection (l), as added by title V of this Act, as subsection (n), and by further redesignating subsections (h), (i), (j), and (k), as redesignated by subsection (a)(2), as subsections (j), (k), (l), and (m), respectively, and

(ii) by inserting after subsection (g), as redesignated by subsection (a)(2), the following new subsections:

"(h) SOLVENCY PLAN MUST BE ADOPTED FOR MULTIEMPLOYER PLANS IN DECLINING STATUS. —

"(1) IN GENERAL. — In any case in which a multiemployer plan is in declining status for a plan year, the plan sponsor, in accordance with this subsection —

"(A) shall adopt a solvency plan not later than 240 days following the required date for the actuarial certification of declining status under subsection (b)(5)(A), and

"(B) within 30 days after the adoption of the solvency plan shall provide to the bargaining parties 1 or more schedules showing revised benefit structures, revised contribution structures, or both, which, if adopted, may reasonably be expected to enable the multiemployer plan to meet the requirements of paragraph (3), including —

"(i) one default proposal under which —

"(I) all adjustable benefits in the form of early retirement subsidies (including early reduction factors which are not provided on an actuarially equivalent basis) under the plan are eliminated, and

"(II) the future monthly benefit accrual rate under the plan is reduced to the equivalent of 1 percent of annual contributions (or, if lower, the current accrual rate) based on the contribution rate in effect as of the later of the first day of the plan year in which the plan enters declining status or the date of a partition under section 4233A, and which may also include reduction or elimination of any other adjustable benefits under the plan, and

"(ii) any additional schedules which reduce or eliminate adjustable benefits under the plan which the plan sponsor deems appropriate to provide as an alternative to the default proposal.

No schedule provided to or adopted by the bargaining parties shall provide for a monthly benefit accrual rate in excess of the rate described in subparagraph (B)(i)(II).

"(2) EXCEPTION FOR YEARS AFTER PROCESS BEGINS. — Paragraph (1) shall not apply to a plan year if such year is in a solvency plan adoption period or solvency attainment period by reason of the plan being in declining status for a preceding plan year, except that the next update of the solvency plan shall fulfill the requirement of paragraph (1)(B)(i). For purposes of this section, such preceding plan year shall be the initial determination year with respect to the solvency plan to which it relates.

"(3) SOLVENCY PLAN. — For purposes of this section, a solvency plan is a plan which consists of the actions, including options or a range of options to be proposed to the bargaining parties, formulated, based on reasonably anticipated experience and reasonable actuarial assumptions, to enable the plan to delay or avoid the projected insolvency.

"(4) SOLVENCY ATTAINMENT PERIOD. — For purposes of this section —

"(A) IN GENERAL. — Except as provided in subparagraph (B), the solvency attainment period for any solvency plan adopted pursuant to this subsection is the period —

"(i) beginning on the first day of the first plan year of the multiemployer plan beginning after the earlier of —

"(I) the second anniversary of the date of the adoption of the solvency plan, or

"(II) the expiration of the collective bargaining agreements in effect on the due date for the actuarial certification of declining status for the initial determination year under subsection (b)(5)(A) and covering, as of such due date, at least 75 percent of the active participants in such plan, and

"(ii) ending on the date the plan either emerges from declining status or becomes insolvent.

"(B) COORDINATION WITH CHANGES IN STATUS. —

"(i) PLANS NO LONGER IN DECLINING STATUS. — If the plan's actuary certifies in accordance with subparagraph (C) for a plan year in any solvency plan adoption period or solvency attainment period that the plan is no longer in declining status, the solvency plan adoption period or solvency attainment period, whichever is applicable, shall end as of the date of such certification.

"(ii) PLANS IN CRITICAL OR ENDANGERED STATUS. — If the plan's actuary certifies under subsection (b)(5)(A) for the plan year described in clause (i) that the plan is in critical or endangered rather than declining status, the provisions of subsections (d) and (e), or subsections (f) and (g), whichever are applicable, shall be applied as if such plan year were an initial determination year, except that the plan may not be amended in a manner inconsistent with the solvency plan in effect for the preceding plan year until a new funding improvement plan or rehabilitation plan, whichever is applicable, is adopted.

"(C) EMERGENCE. — A plan in declining status shall remain in such status until a plan year for which the plan actuary certifies, in accordance with subsection (b)(5)(A), that the plan is not described in one or more of the subparagraphs in subsection (b)(4) as of the beginning of the plan year.

"(5) UPDATES TO SOLVENCY PLANS AND SCHEDULES. —

"(A) SOLVENCY PLAN. — The plan sponsor shall annually update the solvency plan and shall file the update with the plan's annual report under section 104.

"(B) SCHEDULES. — The plan sponsor shall annually update any schedule of contribution rates provided under this subsection to reflect the experience of the plan.

"(C) DURATION OF SCHEDULE. — A schedule of contribution rates provided by the plan sponsor and relied upon by bargaining parties in negotiating a collective bargaining agreement shall remain in effect for the duration of that collective bargaining agreement.

"(6) IMPOSITION OF SCHEDULE WHERE FAILURE TO ADOPT SOLVENCY PLAN. — If —

"(A) INITIAL CONTRIBUTION SCHEDULE. —

"(i) a collective bargaining agreement providing for contributions under a multiemployer plan that was in effect at the time the plan entered declining status expires, and

"(ii) after receiving one or more schedules from the plan sponsor under paragraph (1)(B), the bargaining parties with respect to such agreement fail to adopt a contribution schedule with terms consistent with the solvency plan and a schedule from the plan sponsor,

the plan sponsor shall implement the schedule described in paragraph (1)(B)(i) beginning on the date specified in subparagraph (C).

"(B) SUBSEQUENT CONTRIBUTION SCHEDULE. — If —

"(i) a collective bargaining agreement providing for contributions under a multiemployer plan in accordance with a schedule provided by the plan sponsor pursuant to a solvency plan (or imposed under subparagraph (A)) expires while the plan is still in declining status, and

"(ii) after receiving one or more updated schedules from the plan sponsor under paragraph (5)(B), the bargaining parties with respect to such agreement fail to adopt a contribution schedule with terms consistent with the updated solvency plan and a schedule from the plan sponsor,

then the contribution schedule applicable under the expired collective bargaining agreement, as updated and in effect on the date the collective bargaining agreement expires, shall be implemented by the plan sponsor beginning on the date specified in subparagraph (C).

"(C) DATE OF IMPLEMENTATION. — The date specified in this subparagraph is the date which is 180 days after the date on which the collective bargaining agreement described in subparagraph (A) or (B) expires.

"(7) SOLVENCY PLAN ADOPTION PERIOD. — For purposes of this section, the term 'solvency plan adoption period' means the period beginning on the date of the certification under subsection (b)(5)(A) for the initial determination year and ending on the day before the first day of the solvency attainment period.

"(i) RULES FOR OPERATION OF PLAN DURING ADOPTION AND ATTAINMENT PERIODS. —

"(1) COMPLIANCE WITH SOLVENCY PLAN. —

"(A) IN GENERAL. — A plan may not be amended after the date of the adoption of a solvency plan under subsection (h) so as to be inconsistent with the solvency plan.

"(B) SPECIAL RULES FOR BENEFIT INCREASES. — A plan may not be amended after the date of the adoption of a solvency plan under subsection (h) so as to increase benefits, including future benefit accruals, unless the increase is required by law or is a de minimis change.

"(C) SPECIAL RULES FOR INCREASES IN COMPENSATION OR CONTRIBUTION RATE. — Any increase in employee compensation or contribution rates which takes effect after the first day of the plan year in which the plan enters declining status shall not give rise to an increase in benefits or future benefit accruals under the plan.

"(2) RESTRICTION ON LUMP SUMS AND SIMILAR BENEFITS. —

"(A) IN GENERAL. — Effective on the date the notice of certification of the plan's declining status for the initial determination year under subsection (b)(5)(D) is sent, and notwithstanding section 204(g), the plan shall not pay —

"(i) any payment, in excess of the monthly amount paid under a single life annuity (plus any social security supplements described in the last sentence of section 204(b)(1)(G)), to a participant or beneficiary whose annuity starting date (as defined in section 205(h)(2)) occurs after the date such notice is sent,

"(ii) any payment for the purchase of an irrevocable commitment from an insurer to pay benefits, or

"(iii) any other payment specified by the Secretary of the Treasury by regulations,

unless it is a de minimis amount.

"(B) EXCEPTION. — Subparagraph (A) shall not apply to a benefit which under section 203(e) may be immediately distributed without the consent of the participant or to any makeup payment in the case of a retroactive annuity starting date or any similar payment of benefits owed with respect to a prior period.

"(3) SPECIAL RULES FOR PLAN ADOPTION PERIOD. — During the period beginning on the date of the certification under subsection (b)(5)(A) for the initial determination year and ending on the date of the adoption of a solvency plan —

"(A) the plan sponsor may not accept a collective bargaining agreement or participation agreement with respect to the multiemployer plan that provides for —

"(i) a reduction in the level of contributions for any participants,

"(ii) a suspension of contributions with respect to any period of service, or

"(iii) any new direct or indirect exclusion of younger or newly hired employees from plan participation,

unless the plan sponsor reasonably determines that the acceptance of such an agreement is in the best interests of participants and beneficiaries and that rejection of such agreement would adversely affect the plan, and

"(B) no amendment of the plan which increases the liabilities of the plan 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 may be adopted unless the amendment is required as a condition of qualification under part I of subchapter D of chapter 1 of the Internal Revenue Code of 1986 or to comply with other applicable law.".

(C) SUSPENSION OF BENEFITS. — Section 305 of such Act (29 U.S.C. 1085), as amended by this section, is further amended —

(i) by redesignating paragraph (9) of subsection (f) (as redesignated by subsection (a)(2)) as paragraph (8) of subsection (h) (as added by subparagraph (B)), and

(ii) by moving such paragraph to the position immediately after paragraph (7) of such subsection (h).

(4) CONFORMING AMENDMENTS. —

(A) Subsection (a)(4)(D) of section 305 of such Act (29 U.S.C. 1085), as redesignated and amended by the preceding provisions of this section, is further amended by striking "subsection (f)(9)" and inserting "subsection (h)(8)".

(B) Paragraph (5) of section 305(b) of such Act (29 U.S.C. 1085(b)), as so redesignated and as amended by section 321 and the preceding provisions of this section, is further amended —

(i) by striking "critical" in subparagraph (A)(i)(I) and inserting "critical or declining",

(ii) by striking "funding improvement or rehabilitation period" in subparagraph (A)(i)(II) and inserting "funding improvement, rehabilitation, or solvency attainment period",

(iii) by striking "funding improvement or rehabilitation plan" in subparagraph (A)(i)(II) and inserting "funding improvement, rehabilitation, or solvency plan",

(iv) by striking "endangered or critical" in subparagraph (A)(i)(V)(bb) and inserting "endangered, critical, or declining",

(v) by striking "funding improvement plan or rehabilitation" in subparagraph (A)(iv) and inserting "funding improvement, rehabilitation, or solvency",

(vi) by striking "critical" each place it appears in subparagraph (A)(vi) and inserting "critical or declining",

(vii) by striking "rehabilitation period" in subparagraph (A)(vi) and inserting "rehabilitation or solvency attainment period",

(viii) by striking "as described in subsection (f)(9)" in subparagraph (B)(v),

(ix) by inserting "if the plan is already in a rehabilitation period, and" before "if reasonable" in subparagraph (B)(v)(I),

(x) by striking "subsection (f)(9)" in subparagraph (B)(v)(II) and inserting "subsection (h)(8)",

(xi) by striking "endangered or critical" both places it appears in subparagraph (D)(i) and inserting "endangered, critical, or declining",

(xii) by striking "ENDANGERED OR CRITICAL" in the heading of subparagraph (D)(ii) and inserting "ENDANGERED, CRITICAL, OR DECLINING",

(xiii) by striking "endangered or critical" in subparagraph (D)(ii) and inserting "endangered, critical, or declining",

(xiv) by striking "funding improvement or rehabilitation plan" both places it appears in subclauses (I) and (II) of subparagraph (D)(ii) and inserting "funding improvement, rehabilitation, or solvency plan", and

(xv) by adding at the end of subparagraph (D) the following new clause:

"(vii) NOTICE OF PROJECTION TO BE IN DECLINING STATUS IN A FUTURE PLAN YEAR. — In any case in which it is certified under subparagraph (A)(i) that a multiemployer plan will be in declining status for any of 5 succeeding plan years (but not for the current plan year), the plan sponsor shall, not later than 30 days after the date of the certification, provide notification of the projected declining status to the Pension Benefit Guaranty Corporation.".

(C) Subparagraph (J) of section 305(h)(8) of such Act (29 U.S.C. 1085(h)(8)), as so redesignated and amended, is further amended —

(i) by striking "CRITICAL" in the heading and inserting "DECLINING", and

(ii) by striking "shall not emerge from critical status under paragraph (4)(B)," and inserting "shall not emerge from declining status".

(D) Subsection (j) of section 305 of such Act (29 U.S.C. 1085), as so redesignated and amended, is further amended —

(i) by striking "(f)(8) or (g)" in paragraph (1) and inserting "(f)(8), (g), or (i)",

(ii) by striking "subsection (f)(9)" in paragraph (1) and inserting "subsection (h)(8)",

(iii) by striking "FUNDING IMPROVEMENT OR REHABILITATION PLAN" in the heading of paragraph (3) and inserting "FUNDING IMPROVEMENT, REHABILITATION, OR SOLVENCY",

(iv) by striking "funding improvement plan or rehabilitation plan" both places it appears in subparagraphs (A) and (B) of paragraph (3) and inserting "funding improvement, rehabilitation, or solvency plan",

(v) by striking "ENDANGERED OR CRITICAL" in the heading of paragraph (4), as amended by subsection (a), and inserting "ENDANGERED, CRITICAL, OR DECLINING",

(vi) by striking "endangered or critical" each place it appears in paragraph (4), as so amended, and inserting "endangered, critical, or declining", and

(vii) by striking "critical or endangered" in paragraph (4) and inserting "endangered, critical, or declining".

(E) Subsection (k) of section 305 of such Act (29 U.S.C. 1085), as so redesignated and amended, is further amended —

(i) by striking "or a rehabilitation plan under subsection (f)" and inserting ", a rehabilitation plan under subsection (f), or a solvency plan under subsection (h)",

(ii) by striking "endangered status or a plan in critical status" and inserting "endangered, critical, or declining status",

(iii) by striking "has not agreed on a funding improvement plan or rehabilitation plan" and inserting "has not agreed on a funding improvement, rehabilitation, or solvency plan (whichever is applicable)", and

(iv) by striking "adoption of a funding improvement plan or rehabilitation plan" and inserting "adoption of a funding improvement, rehabilitation, or solvency plan".

(F) Subsection (l) of section 305 of such Act (29 U.S.C. 1085), as so redesignated and amended, is further amended —

(i) by striking "endangered status or in critical status" in paragraph (1) and inserting "endangered, critical, or declining status",

(ii) by striking "endangered or critical" in paragraph (1) and inserting "endangered, critical, or declining", and

(iii) by striking "(d) and (f)" in paragraph (2) and inserting "(d), (f), and (h)".

(G) Section 101(f)(2)(B) of such Act (29 U.S.C. 1021(f)(2)(B)), as amended by this section, is amended —

(i) by striking "305(k)" in clause (i)(II) and inserting "305(m)", and

(ii) by striking "305(k)(8)" in clause (ii)(II) and inserting "305(m)(8)".

(H) Section 101(k)(1)(K) of such Act (29 U.S.C. 1021(k)(1)(K)) is amended —

(i) by striking "critical or endangered" and inserting "endangered, critical, or declining", and

(ii) by striking "funding improvement or rehabilitation" both places it appears and inserting "funding improvement, rehabilitation, or solvency".

(I) Section 103(f)(1)(B)(ii) of such Act (29 U.S.C. 1023(f)(1)(B)(ii)), as amended by this section, is amended by striking "305(k)(2)" and inserting "305(m)(2)".

(J) Section 103(f)(2)(G) of such Act (29 U.S.C. 1023(f)(2)(G)) is amended —

(i) by striking "critical or endangered" and inserting "endangered, critical, or declining", and

(ii) by striking "funding improvement or rehabilitation" and inserting "funding improvement, rehabilitation, or solvency".

(K) Section 104(d)(1)(E) of such Act (29 U.S.C. 1024(d)(1)(E)) is amended —

(i) by striking "critical or endangered" and inserting "endangered, critical, or declining", and

(ii) by striking "funding improvement or rehabilitation" and inserting "funding improvement, rehabilitation, or solvency".

(L) Section 502(a)(10) of such Act (29 U.S.C. 1132(a)(10)) is amended —

(i) by striking "endangered or critical" and inserting "endangered, critical, or declining", and

(ii) by striking "funding improvement or rehabilitation" each place it appears and inserting "funding improvement, rehabilitation, or solvency".

(M) Section 502(c)(8) of such Act (29 U.S.C. 1132(c)(8)) is amended —

(i) by striking "funding improvement plan or rehabilitation" in subparagraph (A) and inserting "funding improvement, rehabilitation, or solvency",

(ii) by striking "endangered or critical" in subparagraph (A) and inserting "endangered, critical, or declining",

(iii) by striking "which is not in seriously endangered status" in subparagraph (B), and

(iv) by striking "meet the applicable benchmarks" in subparagraph (B) and inserting "emerge from endangered status".

(N) Section 4233 of such Act (29 U.S.C. 1413), as amended by this section, is further amended —

(i) by striking "305(f)(9)" each place it appears in subsections (b)(2) and (e)(1)(A) and inserting "305(h)(8)", and

(ii) by striking "305(f)(9)(E)(vi)" in subsection (e)(2) and inserting "305(h)(8)(E)(vi)".

(O) Section 4233(m)(1) of such Act, as added by this Act, is amended by striking "funding improvement or rehabilitation" and inserting "funding improvement, rehabilitation, or solvency".

(P) Section 4233A(h)(4)(C) of such Act, as added by this Act, is amended by striking "rehabilitation plan" and inserting "rehabilitation or solvency plan".

(Q) Section 4233A(m)(1) of such Act, as added by this Act, is amended by striking "funding improvement or rehabilitation" and inserting "funding improvement, rehabilitation, or solvency".

(R) Section 4233A(o)(1) of such Act, as added by this Act, is amended by striking "305(k)(2)" and inserting "305(m)(2)".

(S) Section 4233A(o)(12) of such Act, as added by this Act, is amended by striking "funding improvement plan or rehabilitation" and inserting "funding improvement, rehabilitation, or solvency".

(T) Section 4245 of such Act (29 U.S.C. 1426), as amended by section 112 and this section, is further amended —

(i) by striking "305(b)(3)" each place it appears in subsections (c)(1), (c)(2), (d)(1), and (d)(2) and inserting "305(b)(3), or a plan in declining status, as described in section 305(b)(4)", and

(ii) by striking "305(f)(9)" in subsection (f) and inserting "305(h)(8)".

(e) ADJUSTMENT OF BENEFITS. —

(1) IN GENERAL. — Section 305 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1085), as amended by this section, is further amended —

(A) by further redesignating subsections (m) and (n), as redesignated by subsection (d), as subsections (n) and (o), respectively,

(B) by redesignating paragraph (8) of subsection (f), as redesignated by subsection (a)(2), as subsection (m), and

(C) by moving such subsection to the position immediately after subsection (l).

(2) CLERICAL AND CONFORMING AMENDMENTS. —

(A) The heading of subsection (m) of section 305 of such Act (29 U.S.C. 1085), as redesignated by paragraph (1), is amended to read as follows:

"(m) ADJUSTMENT OF BENEFITS. — ".

(B) The following provisions of such subsection (m) are amended as follows:

(i) Subparagraphs (A), (B), and (C) are redesignated as paragraphs (1), (2), and (4), respectively, and moved 2 ems to the left.

(ii) Clauses (i), (ii), (iii), and (iv) of paragraph (1) (as so redesignated) are redesignated as subparagraphs (A), (B), (C), and (D), respectively, and moved 2 ems to the left.

(iii) Subclauses (I), (II), and (III) of paragraph (1)(D) (as so redesignated) are redesignated as clauses (i), (ii), and (iii), respectively, and moved 2 ems to the left.

(iv) Clauses (i), (ii), and (iii) of paragraph (4) (as so redesignated) are redesignated as subparagraphs (A), (B), and (C), respectively, and moved 2 ems to the left, and the flush sentence at the end of subparagraph (C) (as so redesignated) is moved 2 ems to the left.

(v) Subclauses (I), (II), and (III) of paragraph (4)(A) (as so redesignated) are redesignated as clauses (i), (ii), and (iii), respectively, and moved 2 ems to the left.

(vi) Subclauses (I) and (II) of paragraph (4)(B) (as so redesignated) are redesignated as clauses (i) and (ii), respectively, and moved 2 ems to the left.

(vii) Subclauses (I), (II), and (III) of paragraph (4)(C) (as so redesignated) are redesignated as clauses (i), (ii), and (iii), respectively, and moved 2 ems to the left.

(viii) Paragraph (1)(A), as so redesignated, is amended by striking "subparagraph (C)" and inserting "paragraph (4)".

(ix) Paragraph (1)(B), as so redesignated, is amended by striking "clause (iv)(III)" and inserting "subparagraph (D)(iii)".

(x) Paragraph (1)(D), as so redesignated, is amended by striking "this paragraph" and inserting "this subsection".

(xi) Paragraph (2), as so redesignated, is amended —

(I) by striking "subparagraph (A)(iv)(III)" and inserting "paragraph (1)(D)(iii)", and

(II) by striking "this paragraph" and inserting "this subsection".

(xii) Paragraph (4)(A), as so redesignated, is amended by striking "subparagraph (A)" and inserting "paragraph (1)".

(xiii) Paragraphs (4)(B) and (4)(C), as so redesignated, are each amended by striking "clause (i)" each place it appears and inserting "subparagraph (A)".

(xiv) The last sentence of paragraph (4)(C), as so redesignated, is amended —

(I) by striking "subclause (I)" and inserting "clause (i)", and

(II) by striking "this subparagraph" and inserting "this paragraph".

(3) APPLICATION TO ALL PLANS IN ENDANGERED, CRITICAL, OR DECLINING STATUS. —

(A) IN GENERAL. — Subparagraph (A) of section 305(m)(1) of such Act (29 U.S.C. 1085(m)(1)), as redesignated and amended by this section, is further amended —

(i) by striking "the plan sponsor shall" and inserting "the plan sponsor of a multiemployer plan in endangered, critical, or declining status may", and

(ii) by striking "paragraph (1)(B)(i)" and inserting "subsection (d)(1)(B), (f)(1)(B), or (h)(1)(B), whichever is applicable".

(B) CONFORMING AMENDMENTS. — Subparagraph (B) of section 305(m)(1) of such Act (29 U.S.C. 1085(m)(1)), as redesignated and amended by this section, is further amended by striking "critical" both places it appears and inserting "endangered, critical, or declining".

(4) ADDITIONAL ADJUSTABLE BENEFITS. —

(A) IN GENERAL. — Subparagraph (D) of section 305(m)(1) of such Act (29 U.S.C. 1085(m)(1)), as redesignated by this section, is amended —

(i) by inserting ", including early reduction factors which are not provided on an actuarially equivalent basis," after

"(i))" in clause (ii), as so redesignated,

(ii) by striking "and" at the end of clause (ii) (as so redesignated),

(iii) by striking "that would not be eligible" and all that follows through the period in clause (iii) (as so redesignated) and inserting "which were adopted (or, if later, took effect) less than 120 months before the first day of the first plan year in which the plan was in endangered, critical, or declining status,", and

(iv) by adding at the end the following new clauses:

"(iv) any one-time bonus payment or 'thirteenth check' provision, and

"(v) benefits granted for periods of service prior to participation in the plan.".

(B) CONFORMING AMENDMENTS. —

(i) Subparagraph (B) of section 305(m)(1) of such Act (29 U.S.C. 1085), as redesignated and amended by this section, is further amended by striking "subparagraph (D)(iii)" and inserting "clause (iii), (iv), or (v) of subparagraph (D)".

(ii) Paragraph (2) of section 305(m) of such Act (29 U.S.C. 1085), as amended by paragraph (2)(B), is further amended by striking "paragraph (1)(D)(iii)" and inserting "clause (iii), (iv), or (v) of paragraph (1)(D)".

(iii) Section 4233A(o)(1) of such Act, as added by this Act and as amended by this section, is further amended by striking "305(m)(2)" and inserting "305(n)(2)".

(5) RULES RELATING TO SUSPENSION OF BENEFITS UPON RETURN TO WORK. — Subsection (m) of section 305 of such Act (29 U.S.C. 1085), as redesignated and amended by this section, is further amended by inserting after paragraph (2) the following new paragraph:

"(3) RULES RELATING TO SUSPENSION OF BENEFITS UPON RETURN TO WORK. — The plan sponsor of a multiemployer plan in endangered, critical, or declining status may amend rules regarding the suspension of a participant's benefits upon a return to work after commencement of benefits, or the commencement of benefits after normal retirement age (including in the case of continued employment after normal retirement age). Any such changes shall apply only to future payments of benefits.".

(6) ADDITIONAL CONFORMING AMENDMENTS. —

(A) Clause (iii) of section 305(b)(5)(D) of such Act (29 U.S.C. 1085(b)(5)(D)), as redesignated and amended by this section, is further amended —

(i) by striking "CRITICAL" in the heading and inserting "ENDANGERED, CRITICAL, OR DECLINING",

(ii) by striking "critical status" both places it appears and inserting "endangered, critical, or declining status", and

(iii) by striking "subsection (f)(8)" in subclause (I) and inserting "subsection (m)(1)(D)".

(B) Subsection (j) of section 305 of such Act (29 U.S.C. 1085), as amended by subsection (d), is further amended by striking "(f)(8), (g), or (i)" and inserting "(e), (g), (i), or (m)".

(C) Section 101(f)(2)(B) of such Act (29 U.S.C. 1021(f)(2)(B)), as amended by this section, is amended —

(i) by striking "305(m)" in clause (i)(II) and inserting "305(n)", and

(ii) by striking "305(m)(8)" in clause (ii)(II) and inserting "305(n)(8)".

(D) Section 103(f)(1)(B)(ii) of such Act (29 U.S.C. 1023(f)(1)(B)(ii)), as amended by this section, is amended by striking "305(m)(2)" and inserting "305(n)(2)".

(f) ELECTIONS TO BE IN CRITICAL OR ENDANGERED STATUS. —

(1) IN GENERAL. — Paragraph (6) of section 305(b) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1085(b)), as redesignated and amended by this section, is further amended —

(A) by striking "is not in critical status" in subparagraph (A) and inserting "is not in critical or declining status",

(B) by striking "but that is projected" in subparagraph (A) and inserting "but —

"(i) that is projected",

(C) by striking "5 plan years may, not later than" in subparagraph (A) and inserting "5 plan years, or

"(ii) that is in endangered status and is not reasonably projected to be able to emerge from endangered status within the funding improvement period under the funding improvement plan in effect,

may, not later than", and

(D) by striking "under paragraph (3)" in subparagraph (B) and inserting "under paragraph (3) or for endangered status under paragraph (2)".

(2) ELECTION TO BE IN ENDANGERED STATUS. — Subsection (b) of section 305 of such Act (29 U.S.C. 1085), as so redesignated and amended, is further amended by adding at the end the following new paragraph:

"(8) ELECTION TO BE IN ENDANGERED STATUS. — Notwithstanding paragraph (2) —

"(A) the plan sponsor of a multiemployer plan that is not in endangered, critical, or declining status for a plan year but that is projected by the plan actuary, pursuant to the determination under paragraph (5), to be in endangered status in any of the 5 succeeding plan years, may, not later than 30 days after the date of the certification under paragraph (5)(A), elect to be in endangered status effective for the current plan year,

"(B) the plan year in which the plan sponsor elects to be in endangered status under subparagraph (A) shall be treated for purposes of this section as the first year in which the plan is in endangered status, regardless of the date on which the plan first satisfies the criteria for endangered status under paragraph (2), and

"(C) a plan that is in endangered status under this paragraph shall not emerge from endangered status unless the plan's actuary certifies under paragraph (5)(A) that the plan is no longer in endangered status and is not in critical or declining status.".

(g) AMENDMENTS RELATING TO FUNDING IMPROVEMENT PLAN. —

(1) IN GENERAL. — Paragraph (1) of section 305(d) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1085(d)), as redesignated and amended by this section, is further amended —

(A) by striking the last sentence, and

(B) in subparagraph (B), by striking "funding improvement plan — " and all that follows and inserting "funding improvement plan, shall provide to the bargaining parties 1 or more schedules showing revised benefit structures, revised contribution structures, or both, which, if adopted, may reasonably be expected to enable the multiemployer plan to meet the requirements of paragraph (3), including —

"(i) one default proposal under which —

"(I) all adjustable benefits in the form of early retirement subsidies (including early reduction factors which are not provided on an actuarially equivalent basis) under the plan are eliminated, and

"(II) the future monthly benefit accrual rate under the plan is reduced to the equivalent of 1 percent of annual contributions (or, if lower, the accrual rate as of the date of the enactment of the Chris Allen Multiemployer Pension Recapitalization and Reform Act of 2021) based on the contribution rate in effect as of the first day of the plan year in which the plan enters endangered status, and

which may also include reduction or elimination of any other adjustable benefits under the plan, and

"(ii) any additional schedules which reduce or eliminate adjustable benefits under the plan which the plan sponsor deems appropriate to provide as an alternative to the default proposal.".

(2) FUNDING IMPROVEMENT PLAN. — Paragraph (3) of section 305(d) of such Act (29 U.S.C. 1085(d)), as so redesignated and amended, is further amended —

(A) by striking "For purposes of this section — " and all that follows through "which consists of" in subparagraph (A) and inserting "For purposes of this section, a funding improvement plan is a plan which consists of", and

(B) by striking "formulated to provide" and all that follows and inserting "formulated, based on reasonably anticipated experience and reasonable actuarial assumptions, to —

"(A) enable the plan to emerge from endangered status by the end of the funding improvement period, and

"(B) avoid any accumulated funding deficiencies during the funding improvement period (taking into account any extension of amortization periods under section 304(d)).".

(3) FUNDING IMPROVEMENT PERIOD. — Paragraph (4) of section 305(d) of such Act (29 U.S.C. 1085(d)(4)), as so redesignated and amended, is further amended by striking subparagraph (B) and inserting after subparagraph (A) the following new subparagraph:

"(B) NEW PERIOD BASED ON ADVERSE EXPERIENCE. —

"(i) IN GENERAL. — If the plan's actuary determines necessary based on adverse plan experience, the plan sponsor may provide for a new 10-year period as of the first day of any plan year in the original funding improvement period, but only if the plan is still projected to meet the requirements of the funding improvement plan and emerge from endangered status at the end of the new funding improvement period.

"(ii) LIMITATION. — A plan sponsor may provide a new 10-year period under clause (i) not more than 1 time in any 20consecutive-year period, unless the plan sponsor submits to the Secretary an application for an additional new period. Such application shall include a certification that the plan is projected to emerge from endangered status in the proposed new 10year period and a description of key assumptions, to be specified in regulations promulgated by the Secretary in consultation with the Pension Benefit Guaranty Corporation.".

(4) CONFORMING AMENDMENTS. —

(A) Subparagraph (C) of section 305(d)(4) of such Act (29 U.S.C. 1085(d)(4)), as so redesignated and amended, is further amended —

(i) by striking "critical status" both places it appears in clauses (i) and (ii) and inserting "critical or declining status",

(ii) by striking "rehabilitation period" in clause (ii) and inserting "rehabilitation or solvency attainment period", and

(iii) by striking "CRITICAL STATUS" in the heading of clause (ii) and inserting "CRITICAL OR DECLINING STATUS".

(B) Subsection (d) of section 305 of such Act (29 U.S.C. 1085), as so redesignated and amended, is further amended by striking paragraph (5) and by redesignating paragraphs (6), (7), and (8) as paragraphs (5), (6), and (7), respectively.

(C) Paragraph (6) of section 305(d) of such Act (29 U.S.C. 1085(d)), as so redesignated, is amended —

(i) by striking "(1)(B)(i)(I)" in subparagraph (A) and inserting "(1)(B)(i)", and

(ii) by striking "paragraph (6)(B)" in subparagraph (B)(ii) and inserting "paragraph (5)(B)".

(D) Paragraph (2) of section 305(d) of such Act (29 U.S.C. 1085(d)), as so redesignated, is amended by inserting ", except that the next update of the funding improvement plan shall fulfill the requirement of paragraph (1)(B)(i)" after "for a preceding plan year".

(h) AMENDMENTS RELATING TO REHABILITATION PLAN. —

(1) IN GENERAL. — Paragraph (1) of section 305(f) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1085(f)), as redesignated and amended by this section, is further amended —

(A) by striking the last 2 sentences, and

(B) in subparagraph (B), by striking "rehabilitation plan — " and all that follows and inserting "rehabilitation plan, shall provide to the bargaining parties 1 or more schedules showing revised benefit structures, revised contribution structures, or both, which, if adopted, may reasonably be expected to enable the multiemployer plan to meet the requirements of paragraph (3), including —

"(i) one default proposal under which —

"(I) all adjustable benefits in the form of early retirement subsidies (including early reduction factors which are not provided on an actuarially equivalent basis) under the plan are eliminated, and

"(II) the future monthly benefit accrual rate under the plan is reduced to the equivalent of 1 percent of annual contributions (or, if lower, the accrual rate as of the date of the enactment of the Chris Allen Multiemployer Pension Recapitalization and Reform Act of 2021) based on the contribution rate in effect as of the first day of the plan year in which the plan enters critical status, and which may also include reduction or elimination of any other adjustable benefits under the plan, and

"(ii) any additional schedules which reduce or eliminate adjustable benefits under the plan which the plan sponsor deems appropriate to provide as an alternative to the default proposal.

In the case of a plan adopting a rehabilitation plan described in paragraph (3)(A)(ii), no schedule provided to or adopted by the bargaining parties shall provide for a monthly benefit accrual rate in excess of the rate described in subparagraph (B)(i)(II).".

(2) REHABILITATION PLAN. —

(A) IN GENERAL. — Subparagraph (A) of section 305(f)(3) of such Act (29 U.S.C. 1085(f)(3)), as so redesignated, is amended —

(i) by striking "and may include" and all that follows through "such actions" in clause (i),

(ii) by inserting ", while delaying insolvency for as long as possible and maximizing the income of the plan, including income after insolvency" before the period in clause (ii), and

(iii) by striking "(1)(B)(i)" in the last sentence and inserting "(1)(B)".

(B) CONFORMING AMENDMENTS. — Clause (i) of section 305(f)(3)(C) of such Act (29 U.S.C. 1085(f)(3)(C)), as so redesignated, is amended —

(i) by striking "(1)(B)(i)" in subclause (II) and inserting "(1)(B)", and

(ii) by striking "the last sentence of paragraph (1)" and inserting "paragraph (1)(B)(i)".

(3) REHABILITATION PERIOD. —

(A) IN GENERAL. — Subparagraph (A) of section 305(f)(4) of such Act (29 U.S.C. 1085(f)(4)), as so redesignated and amended, is further amended —

(i) by striking "The rehabilitation period" and inserting "Except as otherwise provided in this subparagraph, the rehabilitation period", and

(ii) by adding at the end the following: "If, upon exhaustion of all reasonable measures, the plan is not reasonably expected to emerge from critical status by the end of such 10-year period, the rehabilitation period shall be extended to take into account the projected date of emergence from critical status (if the rehabilitation plan remained in effect until such date) or the projected date of insolvency (if applicable) (unless the plan enters declining status).".

(B) EMERGENCE FROM CRITICAL STATUS. — Subparagraph (B) of section 305(f)(4) of such Act (29 U.S.C. 1085(f)(4)), as so redesignated and amended, is further amended —

(i) by inserting "and is not in declining status," after the comma in clause (i)(I),

(ii) by striking subclause (III) of clause (i) and inserting the following:

"(III) the plan's projected funded percentage as of the first day of the 15th succeeding plan year is at least 100 percent and is projected to increase after such date.",

(iii) by striking "that — " and all that follows through "regardless of whether" in clause (ii)(I) and inserting "that the plan meets the requirements of subclauses (II) and (III) of clause (i), regardless of whether", and

(iv) by striking "unless — " and all that follows in clause (ii)(II) and inserting "unless, as of such plan year, the plan fails to meet the requirements of subclause (II) or (III) of clause (i).".

(4) RULES RELATING TO BENEFIT INCREASES DURING REHABILITATION PERIOD. — Subparagraph (B) of section 305(g)(1) of such Act (29 U.S.C. 1085(g)(1)), as so redesignated and amended, is further amended by striking "unless" and all that follows and inserting "unless the amendment is required as a condition of qualification under part I of subchapter D of chapter 1 of the Internal Revenue Code of 1986 or to comply with other applicable law, or the amendment provides for only a de minimis increase in the liabilities of the plan.".

(5) CONFORMING AMENDMENTS. —

(A) Paragraph (6) of section 305(f) of such Act (29 U.S.C. 1085(f)), as so redesignated, is amended by striking "the last sentence of paragraph (1)" and inserting "paragraph (1)(B)(i)".

(B) Paragraph (2) of section 305(f) of such Act (29 U.S.C. 1085(f)), as so redesignated, is amended by inserting ", except that the next update of the rehabilitation plan shall fulfill the requirement of paragraph (1)(B)(i)" after "for a preceding plan year".

(i) ACTUARIAL ASSUMPTIONS. —

(1) IN GENERAL. — Subsection (n) of section 305 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1085), as redesignated by subsections (a), (d), and (e), is amended —

(A) by striking "METHOD" in the heading and inserting "METHOD AND ASSUMPTIONS", and

(B) by adding at the end the following new paragraph:

"(11) ACTUARIAL ASSUMPTIONS. —

"(A) IN GENERAL. — The actuarial assumptions relied upon for purposes of this section by a plan actuary shall be individually reasonable and, in the aggregate, shall be reasonable and (with the exception of assumptions regarding future contributions) represent the actuary's best estimate of future plan experience, within limitations prescribed by the Secretary of the Treasury. A plan actuary shall avoid conservatism or optimism in individual assumptions to the extent that they would result in a set of assumptions that is unreasonable in the aggregate.

"(B) INVESTMENT RETURNS. — The investment return assumption for projecting plan assets may differ from the actuarial valuation interest rate. In selecting the investment return assumption for projecting plan assets, the plan actuary shall estimate the expected return of the plan's investments as currently invested and as expected to be invested in the future, consistent with the plan's adopted investment policy, if applicable. It is reasonable for an actuary to expect that the plan's investment decisions will consider risk, expected returns over time, and expected future benefit payments. The investment return assumption shall not exceed the interest rate used to determine past service liability under section 431(b)(6).

"(C) CONTRIBUTIONS. —

"(i) IN GENERAL. — The plan actuary shall develop assumptions for the projection of future contributions, including assumptions regarding industry activity among contributing employers and contribution rates, based on information provided by the plan sponsor, which must act reasonably and in good faith. The plan actuary shall certify the reasonableness of all assumptions.

"(ii) PROJECTED INDUSTRY ACTIVITY. — Any projection of activity in the industry or industries covered by the plan, including future covered employment and contribution levels, shall be based on information provided by the plan sponsor acting reasonably and in good faith.

"(iii) FUTURE CONTRIBUTION BASE UNITS. —

"(I) DECLINING CONTRIBUTION BASE UNITS. — If recent experience of the plan has been declining contribution base units, the plan actuary may assume future contribution base units will continue to decline at the same annualized trend as over the 5 immediately preceding plan years, unless the actuary determines that there have been significant changes that would make such assumption unreasonable.

"(II) FLAT OR INCREASING CONTRIBUTION BASE UNITS. — If recent experience of the plan has been increasing, or neither increasing nor decreasing, contribution base units, the plan actuary may assume future contribution base units will remain unchanged indefinitely, unless the actuary determines that there have been significant changes that would make such assumption unreasonable.

"(iv) FUTURE CONTRIBUTION RATES. —

"(I) IN GENERAL. — Projections of contributions shall be based on the contribution rates consistent with the terms of collective bargaining and participation agreements currently in effect.

"(II) FUTURE INCREASES IN ACCORDANCE WITH CORRECTION PLANS. — If reasonable and applicable, the plan actuary may assume future increases in contribution rates consistent with the adopted funding improvement plan, rehabilitation plan, or solvency plan.

"(III) ADDITIONAL FACTORS. — Information provided by the plan sponsor to the plan actuary in setting the assumption regarding future increases in contribution rates shall take into account the ability of the participating employers to make contributions at the scheduled rates over time, considering relevant factors such as projected industry activity, the financial strength of participating employers, market competition, and the scheduled contribution rate to the plan relative to the overall wage package.

"(D) ASSUMPTIONS FOR DEVELOPING SCHEDULES. — All schedules under any funding improvement plan, rehabilitation plan, or solvency plan must be developed based on the same set of actuarial assumptions unless it would be unreasonable to do so, taking into account the anticipated impact of the schedules on participant behavior and employer participation.".

(2) ADDITIONS TO FORM 5500 SCHEDULE MB. — Subparagraph (B) of section 305(b)(5) of such Act (29 U.S.C. 1085(b)(5)), as redesignated and amended by this section, is further amended by adding at the end the following new clause:

"(vi) ADDITIONAL ATTACHMENTS. — The plan actuary shall attach to the certification required under subparagraph (A) —

"(I) documentation supporting the certification of status under subparagraph (A)(i), including projections of the funding standard account, funded percentage, and solvency of the plan,

"(II) a clear description of the key assumptions used in performing the projections, including investment returns, contribution base units, and contribution rates,

"(III) a 5-year history of contributions, including contribution base units, average contribution rates, and withdrawal liability payments, and a comparison of such contribution base units, rates, and payments to projections made by the plan, and

"(IV) an alternate projection of the funding standard account, funded percentage, and solvency, based on the following assumptions:

"(aa) Annual future investment returns on plan assets equal the actuarial interest rate assumption minus 1 percent.

"(bb) Future contribution base units projected using a trend equal to the lesser of —

"(AA) the annualized trend of actual contribution base units over the 5 preceding plan years, and

"(BB) no change in future contribution base units.

"(cc) No increases in future contribution rates beyond those consistent with the collective bargaining agreements and participation agreements in effect for the plan year.

"(dd) The withdrawal from the plan of the employer which has contributed the greatest total amount of contributions over the 5 preceding plan years, if such employer has contributed at least 10 percent of the total contributions to the plan over such 5 plan years and such employer has a below investment grade credit rating (but only if obtaining the credit rating of such employer is not an undue burden).

"(ee) If such credit rating cannot be obtained without undue burden, the withdrawal of the employer which has contributed the greatest total amount of contributions over the 5 preceding plan years, if such employer has contributed at least 10 percent of the total contributions to the plan over such 5 plan years without regard to collection of any withdrawal liability.

"(ff) If no employer has contributed at least 10 percent of the total contributions to the plan over the 5 preceding plan years, the withdrawal of the employer which contributed the greatest total amount of contributions for the current plan year, without regard to collection of any withdrawal liability, unless the employer contributed less than 1 percent of the total contributions to the plan for such plan year.

"(gg) Other assumptions consistent with the projection based on the actuary's best estimate assumptions.".

(3) CONFORMING AMENDMENTS. —

(A) Section 305(b)(5)(B)(i) of such Act (29 U.S.C. 1085(b)(5)(B)(i)), as redesignated by this section, is amended by striking "assumptions" and inserting "assumptions meeting the requirements of subsection (n)(11)".

(B) Section 305(b)(5)(A)(vi) of such Act (29 U.S.C. 1085(b)(5)(A)(vi), as amended by this section and section 321, is further amended by striking "reasonable actuarial assumptions" and inserting "assumptions meeting the requirements of subsection (n)(11)".

(C) Paragraph (3) of section 305(d) of such Act (29 U.S.C. 1085(d)), as amended by subsection (g), is further amended by striking "reasonable actuarial assumptions" and inserting "assumptions meeting the requirements of subsection (n)(11)".

(D) Clause (i) of section 305(f)(3)(A) of such Act (29 U.S.C. 1085(f)(3)(A)), as amended by subsection (h), is further amended by striking "reasonable actuarial assumptions" and inserting "assumptions meeting the requirements of subsection (n)(11)".

(E) Section 305(h)(3) of such Act (29 U.S.C. 1085(h)(3)), as added by subsection (d), is amended by striking "reasonable actuarial assumptions" and inserting "assumptions meeting the requirements of subsection (n)(11)".

(j) CONFORMING AMENDMENTS RELATING TO PREMIUMS. — Paragraph (10) of section 4006(a) of such Act (29 U.S.C. 1306(a)), as added by this Act, is amended —

(1) by striking "305(b)(7)" in subparagraph (B)(iii) thereof and inserting "305(b)(4)",

(2) by striking "critical and declining" in subparagraph (B)(iii) thereof and inserting "declining", and

(3) by striking "305(f)(9)" in subparagraph (C) and inserting "305(h)(8)".

(k) CONFORMING AMENDMENTS RELATING TO COMPOSITE AND LEGACY PLANS. —

(1) Sections 203(a)(3)(E)(ii), 204(b)(1)(B)(i), 204(b)(1)(H)(v), and 204(g)(1) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1053(a)(3)(E)(ii), 1054(b)(1)(B)(i), 1054(b)(1)(H)(v), and 1054(g)(1)), as amended by title V, are each further amended by striking "305(f)" each place it appears and inserting "305(h)(8)".

(2) Sections 304(b)(10), 805(d)(2)(D), and 805(d)(4) of such Act, as added by title V, are each amended by striking "endangered or critical" and inserting "endangered, critical, or declining".

(3) Section 801(b)(1) of such Act, as so added, is amended by striking "endangered or critical" both places it appears and inserting "endangered, critical, or declining".

(4) Sections 801(b)(1), 801(b)(5)(B), 805(b)(1)(A), and 805(e)(3) of such Act, as so added, are each amended by striking "305(b)(4)" and inserting "305(b)(5)".

(5) Sections 801(b)(5)(B) and 805(b)(1)(A) of such Act, as so added, are each amended by striking "endangered or critical" and inserting "endangered, critical, or declining".

(6) Section 802(b)(1) of such Act, as so added, 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 adding at the end the following new subparagraph:

"(D) consistent with the principles of subparagraphs (B), (C), and (D) of section 305(n)(11).".

(7) Sections 802(b)(5) and 805(d)(2)(A) of such Act, as so added, are each amended by striking "305(b)(4)(B)" and inserting "305(b)(5)(B)".

(8) Section 803(a)(2)(D) of such Act, as so added, is amended by striking "305(f)(9)(D)(vi)" and inserting "305(h)(8)(D)(vi)".

(9) Section 803(a)(3) of such Act, as so added, is amended by striking "305(f)(8)" and inserting "305(m)(1)(D)".

(10) Section 805(d)(2)(D) of such Act, as so added and amended, is further amended by striking "funding improvement or rehabilitation plan" and inserting "funding improvement, rehabilitation, or solvency plan".

(l) ADDITIONAL CONFORMING AMENDMENTS. —

(1) Section 502(c) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1132(c)) is amended —

(A) in paragraph (7)(B), as added by section 322, by striking "305(b)(4)(D)" and inserting "305(b)(5)(D)", and

(B) in paragraph (14), as so added and as redesignated by section 501 —

(i) by striking "305(b)(4)(D)" in subparagraph (A) and inserting "305(b)(5)(D)", and

(ii) by striking "305(b)(4)" in subparagraph (B) and inserting "305(b)(5)".

(2) Section 4003(g) of such Act (29 U.S.C. 1303(g)), as added by section 321, is amended by striking "section 305(b)(4)(A)" and inserting "section 305(b)(5)(A)".

(3) Section 4042(b)(2)(B)(i) of such Act (29 U.S.C. 1342(b)(2)(B)), as added by section 301, is amended —

(A) by striking "critical and declining" and inserting "declining", and

(B) by striking "(7)" and inserting "(4)".

(m) EFFECTIVE DATE. — Except as otherwise provided in subsection (a)(7), the amendments made by this section shall apply to plan years beginning after December 31, 2021.

(n) CREDIT RATINGS. — No requirement of section 939 or 939A of the Dodd-Frank Wall Street Reform and Consumer Protection Act (124 Stat. 1887; 15 U.S.C. 780-7 note) shall apply with respect to the amendment made by subsection (i)(2).

SEC. 213. TRANSITION RULES.

(a) PLANS IN ENDANGERED STATUS. —

(1) IN GENERAL. — In the case of a multiemployer plan which is in endangered status as of the date of the enactment of this Act, and is on schedule as of such date to meet the applicable benchmarks in accordance with the plan's funding improvement plan —

(A) ELECTION TO APPLY LAW BEFORE AMENDMENT. — The plan sponsor may elect to remain in endangered status and to apply section 432 of the Internal Revenue Code of 1986 and section 305 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1085) as in effect before January 1, 2022, to the plan, but only if the plan continues to meet such applicable benchmarks.

(B) TRANSITIONAL EFFECTIVE DATE. — If the plan sponsor does not make the election under paragraph (1) —

(i) section 432 of such Code and section 305 of such Act as in effect on January 1, 2022, shall apply to such plan as of the first day of the first plan year beginning after December 31, 2021, and

(ii) section 432(d)(1)(B)(i)(II) of such Code and section 305(d)(1)(B)(i)(II) of such Act, as amended by sections 211(g) and 212(g), respectively, shall each apply to such plan by substituting "the date of the enactment of the Chris Allen Multiemployer Pension Recapitalization and Reform Act of 2021" for "the first day of the plan year in which the plan enters endangered status".

In the case of any plan with respect to which the plan sponsor makes the election under subparagraph (A) but which fails to continue to meet the applicable benchmarks under the funding improvement plan, this subparagraph shall apply to such plan by substituting "the plan year after the first plan year for which the plan fails to meet the applicable benchmarks" for "the first plan year beginning after December 31, 2021".

(2) PLANS ENTERING ENDANGERED STATUS BETWEEN ENACTMENT AND JANUARY 1, 2022. — In the case of a multiemployer plan which enters endangered status after the date of the enactment of this Act and before January 1, 2022 —

(A) section 432 of such Code and section 305 of such Act as in effect on January 1, 2022, shall apply to such plan as if already in effect, and

(i) section 432(d)(1)(B)(i)(II) of such Code and section 305(d)(1)(B)(i)(II) of such Act, as amended by sections 211(g) and 212(g), respectively, shall each apply to such plan by substituting "the date of the enactment of the Chris Allen Multiemployer Pension Recapitalization and Reform Act of 2021" for "the first day of the plan year in which the plan enters endangered status".

(b) PLANS IN CRITICAL OR CRITICAL AND DECLINING STATUS. —

(1) IN GENERAL. — In the case of a qualified critical multiemployer plan —

(A) ELECTION TO APPLY LAW BEFORE AMENDMENT. — The plan sponsor may elect to remain in critical or critical and declining status and to apply section 432 of the Internal Revenue Code of 1986 and section 305 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1085) as in effect before January 1, 2022, to the plan, but only if the plan continues to make scheduled progress under the plan's rehabilitation plan.

(B) TRANSITIONAL EFFECTIVE DATE. — If the plan sponsor does not make the election under paragraph (1) —

(i) section 432 of such Code and section 305 of such Act as in effect on January 1, 2022, shall apply to such plan as of the first day of the first plan year beginning after December 31, 2021,

(ii) section 432(f)(1)(B)(i)(II) of such Code and section 305(f)(1)(B)(i)(II) of such Act, as amended by sections 211(h) and 212(h), respectively, shall each apply to such plan by substituting "the date of the enactment of the Chris Allen Multiemployer Pension Recapitalization and Reform Act of 2021" for "the first day of the plan year in which the plan enters critical status", and

(iii) section 432(h)(1)(B)(i)(II) of such Code and section 305(h)(1)(B)(i)(II) of such Act, as amended by sections 211(d)(3) and 212(d)(3), respectively, shall each apply to such plan by substituting "the date of the enactment of the Chris Allen Multiemployer Pension Recapitalization and Reform Act of 2021" for "the first day of the plan year in which the plan enters declining status".

In the case of any plan with respect to which the plan sponsor makes the election under subparagraph (A) but which fails to continue to make scheduled progress under the rehabilitation plan, this subparagraph shall apply to such plan by substituting "the plan year after the first plan year for which the plan fails to make scheduled progress under the rehabilitation plan" for "the first plan year beginning after December 31, 2021".

(C) APPLICATION OF PREMIUM AMENDMENTS. — A plan with respect to which the plan sponsor makes the election under subparagraph (A) shall be treated as described in clause (iii) of section 4006(a)(10)(B) of the Employee Retirement Income Security Act of 1974 until such time as the plan emerges from critical and declining status pursuant to section 432 of such Code and section 305 of such Act as in effect before January 1, 2022.

(2) PLANS ENTERING CRITICAL OR CRITICAL AND DECLINING STATUS BETWEEN ENACTMENT AND JANUARY 1, 2022. — In the case of a multiemployer plan which enters critical or critical and declining status after the date of the enactment of this Act and before January 1, 2022 —

(A) section 432 of such Code and section 305 of such Act as in effect on January 1, 2022, shall apply to such plan as if already in effect,

(B) section 432(f)(1)(B)(i)(II) of such Code and section 305(f)(1)(B)(i)(II) of such Act, as amended by sections 211(h) and 212(h), respectively, shall each apply to such plan by substituting "the date of the enactment of the Chris Allen Multiemployer Pension Recapitalization and Reform Act of 2021" for "the first day of the plan year in which the plan enters critical status", and

(C) section 432(h)(1)(B)(i)(II) of such Code and section 305(h)(1)(B)(i)(II) of such Act, as amended by sections 211(d)(3) and 212(d)(3), respectively, shall each apply to such plan by substituting "the date of the enactment of the Chris Allen Multiemployer Pension Recapitalization and Reform Act of 2021" for "the first day of the plan year in which the plan enters declining status".

(3) QUALIFIED CRITICAL MULTIEMPLOYER PLAN. — For purposes of this subsection, the term "qualified critical multiemployer plan" means a multiemployer plan which is in critical or critical and declining status as of the date of the enactment of this Act, and is making scheduled progress under the plan's rehabilitation plan, but only if the rehabilitation plan (as in effect without regard to the amendments made by this Act) targets emergence from critical status not later than 3 years after the end of the rehabilitation period as in effect with respect to such plan on the date of the enactment of this Act.

(c) ELECTION. —

(1) IN GENERAL. — An election under subsection (a)(1)(A) or (b)(1)(A) shall be made —

(A) by notice to the Secretary of the Treasury and the Pension Benefit Guaranty Corporation, in such manner as the Secretary of the Treasury may prescribe, and

(B) not later than the due date for the notice of endangered status or critical status for the first plan year beginning after December 31, 2021.

(2) PERIODS AFTER ELECTION. — After making a timely election under paragraph (1) —

(A) the plan sponsor shall annually review and update (if necessary) the plan's funding improvement plan or rehabilitation plan, and

(B) the plan actuary shall certify annually whether the plan is making scheduled progress under the funding improvement plan or rehabilitation plan.

(d) DEFINITIONS. — Any term used in this section which is also used in section 432 of the Internal Revenue Code of 1986 or section 305 of the Employee Retirement Income Security Act of 1974 (before or after the amendments made by this Act) shall have the same meaning as when used in such sections.

PART II — PROVISIONS RELATING TO PLAN MERGERS

SEC. 221. PROVISIONS RELATING TO PLAN MERGERS AND CONSOLIDATIONS.

(a) IN GENERAL. — Section 4231(c) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1411(c)) is amended —

(1) by striking "section 406(a) or section 406(b)(2)" and inserting "section 404, 406(a), or 406(b)(2)", and

(2) by adding at the end the following: "The corporation shall prescribe safe harbor provisions whereby a merger of multiemployer plans or the transfer of assets or liabilities between multiemployer plans, where one of the plans is in critical and declining status pursuant to section 305 and one is in stable or unrestricted status pursuant to such section, shall be deemed to satisfy the requirements of this section. Notwithstanding the preceding sentences, the implementation of such merger or transfer shall be subject to the rules of section 404.".

(b) CALCULATION OF WITHDRAWAL LIABILITY. —

(1) IN GENERAL. — Section 4231 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1411) is amended by adding at the end the following new subsection:

"(f) CALCULATION OF WITHDRAWAL LIABILITY POST-MERGER. — The corporation shall prescribe the methods and conditions under which employers contributing to plans which are in stable or unrestricted status under section 305 when such plan merges with a plan in declining status under such section will not be allocated the unfunded vested benefits of the plan in declining status (as determined immediately before the merger).".

(2) EFFECTIVE DATE. — The amendment made by this section shall apply to plan mergers after December 31, 2021.

SEC. 222. CLARIFICATION OF PBGC FINANCIAL ASSISTANCE FOR PLAN MERGERS AND PARTITIONS.

(a) IN GENERAL. — Paragraph (2) of section 4231(e) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1411(e)) is amended —

(1) by striking the semicolon in subparagraph (B)(ii) and inserting ", determined solely with respect to the liabilities and assets of the plan which was in critical and declining status prior to the merger; and"; and

(2) by striking subparagraph (C) and redesignating subparagraph (D) as subparagraph (C).

(b) PARTITIONS. — Section 4233(b) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1413(b)) is amended by striking paragraph (4), by adding "and" at the end of paragraph (3)(B), and by redesignating paragraph (5) as paragraph (4).

(c) CONFORMING AMENDMENT RELATING TO STATUS CHANGES. — Section 4231(e)(2)(B)(ii) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1411(e)(2)(B)(ii)), as amended by subsection (a), is further amended by striking "critical and declining" and inserting "declining".

(d) EFFECTIVE DATES. —

(1) IN GENERAL. — The amendments made by subsections (a) and (b) shall apply to plan mergers and partitions taking effect after the date of the enactment of this Act.

(2) CONFORMING AMENDMENT. — The amendment made by subsection (c) shall apply to plan mergers taking effect in plan years beginning after December 31, 2021.

SEC. 223. RESTORATION NOT REQUIRED FOR CERTAIN MERGERS.

(a) AMENDMENT OF INTERNAL REVENUE CODE OF 1986. — Clause (ii) of section 432(f)(9)(C) of the Internal Revenue Code of 1986, as redesignated by section 211(a) and as in effect before the amendments made by section 211 other than subsection (a) thereof, is amended by adding at the end the following flush language:

"If, during the period of the benefit suspension, the plan merges with a plan which is in stable or unrestricted status, nothing in this clause shall be construed to require the plan formed by the merger to restore the suspension of benefits.".

(b) AMENDMENT OF ERISA. — Clause (ii) of section 305(f)(9)(C) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1085(f)(9)(C)), as redesignated by section 212(a) and as in effect before the amendments made by section 212 other than subsection (a) thereof, is amended by adding at the end the following flush language:

"If, during the period of the benefit suspension, the plan merges with a plan which is in stable or unrestricted status, nothing in this clause shall be construed to require the plan formed by the merger to restore the suspension of benefits.".

(c) EFFECTIVE DATE. — The amendments made by subsections (a) and (b) shall apply to plan mergers taking effect after the date of the enactment of this Act.

PART III — WITHDRAWAL LIABILITY REFORM

SEC. 231. WITHDRAWAL LIABILITY REFORM.

(a) WITHDRAWAL LIABILITY DEFINITION. — Section 4201(b)(1) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1381(b)(1)) is amended to read as follows:

"(1) DETERMINATION OF WITHDRAWAL LIABILITY. —

"(A) IN GENERAL. — The withdrawal liability of an employer to a plan is the applicable amount determined under subparagraph (B), adjusted —

"(i) first, in the case of a partial withdrawal, in accordance with section 4206;

"(ii) second, by any de minimis reduction applicable under section 4209; and

"(iii) third, in accordance with section 4225.

"(B) APPLICABLE AMOUNT. — The applicable amount determined under this subparagraph is the lesser of —

"(i) the amount determined under section 4211 to be the allocable amount of unfunded vested benefits; or

"(ii) the present value of a series of 20 equal annual payments in the amount determined with respect to the employer under section 4219(c)(1)(C).

In the case of an employer withdrawing from a multiemployer plan described in subparagraph (C), clause (i) shall be applied by substituting '25' for '20'.

"(C) PLANS FOR WHICH 25 PAYMENTS REQUIRED. —

"(i) IN GENERAL. — A multiemployer plan is described in this subparagraph if the plan —

"(I) is certified to be in declining status (or, for plan years prior to 2022, in critical or declining status) for the plan year in which the employer's withdrawal occurs; or

"(II) terminates as described in section 4041A(a) or 4042.

"(ii) SPECIAL RULE FOR TERMINATIONS. — Clause (i)(II) shall apply to each employer who withdraws from a plan during a period of 3 consecutive plan years that includes the withdrawal of every employer from the plan, or the cessation of the obligation of all employers to contribute under the plan, as described in section 4041A(a)(2). For purposes of this clause, withdrawal by an employer from a plan, during a period of 3 consecutive plan years within which substantially all the employers who have an obligation to contribute under the plan, as described in section 4041A(a)(2). For purposes of this clause, withdrawal by an employer from a plan, during a period of 3 consecutive plan 5 years within which substantially all the employers who have an obligation to contribute under the plan withdraw, shall be presumed to be a withdrawal pursuant to an agreement or arrangement, unless the employer proves otherwise by a preponderance of the evidence.