S. Amdt. 2582 - To Modify Pension Funding Rules Related to Airlines, and for Other Purposes.

Sponsor:
This is an amendment to S. 1783 - Pension Security and Transparency Act of 2005
Senate Vote: Amendment SA 2582 agreed to in Senate by Voice Vote.

PASSED by voice vote on November 16, 2005.

Other Votes:

Pension Security and Transparency Act of 2005

S. 1783 — 109th Congress (2005–2006)

Summary
A bill to amend the Employee Retirement Income Security Act of 1974 and the Internal Revenue Code of 1986 to reform the pension funding rules, and for other purposes. (by CRS)
Learn More
At OpenCongress
Title
A bill to amend the Employee Retirement Income Security Act of 1974 and the Internal Revenue Code of 1986 to reform the pension funding rules, and for other purposes.
Other Titles
  • Pension Reform bill
  • Pension Security and Transparency Act of 2005
  • Pension Security and Transparency Act of 2005
Sponsor
Chuck Grassley
Co-Sponsors
Subjects
  • Pensions
  • Administrative procedure
  • Age discrimination
  • Aged
  • Airline employees
  • Alabama
  • Annuities
  • Assassination
  • Bankruptcy
  • Black lung
  • Business
  • Civil rights
  • Civil service retirement
  • Coal
  • Congress
  • Congressional investigations
  • Corporate mergers
  • Cost of living adjustments
  • Criminal justice
  • Defined benefit pension plans
  • Defined contribution plans
  • Department of the Treasury
  • Disaster relief
  • Divorce
  • Education
  • Emergency management
  • Employee ownership
  • Energy
  • Families
  • Finance
  • Financial planning
  • Financial statements
  • Floods
  • Florida
  • Government employees
  • Government employees' life insurance
  • Government information
  • Government paperwork
  • Higher education
  • Hurricane aftermath legislation
  • Hurricanes
  • Income tax
  • Indians
  • Individual retirement accounts
  • Insurance premiums
  • Interest rates
  • Investment advisers
  • Investments
  • Judicial compensation
  • Labor
  • Law
  • Leave of absence
  • Legal education
  • Life insurance
  • Louisiana
  • Magistrates
  • Miners
  • Minorities
  • Mississippi
  • Pension funds
  • Pension trust guaranty insurance
  • Railroad retirement plans
  • Real estate investment
  • Retirement
  • Small business
  • Standards
  • Stocks
  • Survivors' benefits
  • Tax courts
  • Tax deductions
  • Tax exclusion
  • Tax-deferred compensation plans
  • Taxation
  • Teachers
  • Texas
  • Transportation
  • Unemployment insurance
  • Valuation
  • Workers' compensation
Related Bills
Major Actions
Introduced9/28/2005
Amendments (4 proposed)
Passed Senate11/16/2005
Bill History
Chamber/CommitteeMotionDateResult
select this voteSenateAmendment SA 2581 agreed to in Senate by Unanimous Consent.11/16/2005PASSED by voice vote
currently selectedSenateAmendment SA 2582 agreed to in Senate by Voice Vote.11/16/2005PASSED by voice vote
select this voteSenateAkaka Amdt. No. 258311/16/2005This amendment PASSED the Senate
58 voted YES 41 voted NO 1 voted present/not voting
select this voteSenateOn Passage - Senate - S.1783 as Amended11/16/2005This bill PASSED the Senate
97 voted YES 2 voted NO 1 voted present/not voting
ActionDateDescription
Introduced9/28/2005
Put on a legislative calendar9/28/2005Introduced in the Senate. Read twice. Ordered Placed on Senate Legislative Calendar under General Orders. Calendar No. 231.
11/16/2005Measure laid before Senate by unanimous consent.
11/16/2005Amendment SA 2581 proposed by Senator Enzi for Senator Grassley.
select this voteVote11/16/2005Amendment SA 2581 agreed to in Senate by Unanimous Consent.
11/16/2005Amendment SA 2582 proposed by Senator Isakson.
currently selectedVote11/16/2005Amendment SA 2582 agreed to in Senate by Voice Vote.
11/16/2005Amendment SA 2583 proposed by Senator Akaka.
select this voteVote11/16/2005Akaka Amdt. No. 2583
select this voteSenate Vote on Passage11/16/2005On Passage - Senate - S.1783 as Amended
12/22/2005Senate ordered measure printed as passed.
12/23/2005Message on Senate action sent to the House.
3/03/2006See also H.R.2830.
NumberSponsorDate OfferedStatus
S. Amdt. 1967Crapo, Michael [R-ID]October 3, 2005Offered on October 2, 2005.

Amendment information not available.

Show amendment details

select this voteS. Amdt. 2581Grassley, Charles [R-IA]November 16, 2005Passed by voice vote on November 15, 2005.

In the nature of a substitute.

Show amendment details

currently selectedS. Amdt. 2582Isakson, John [R-GA]November 16, 2005Passed by voice vote on November 16, 2005.

To modify pension funding rules related to airlines, and for other purposes.

Actions

November 16, 2005, 12:00 am ET - Amendment SA 2582 proposed by Senator Isakson.
November 16, 2005, 12:00 am ET - Amendment SA 2582 agreed to in Senate by Voice Vote.

Full Text of this Amendment

SA 2582. Mr. ISAKSON (for himself, Mr. NELSON of Florida, Mr. LOTT, Mr. COLEMAN, Mr. ROCKEFELLER, Mr. DEWINE, Mr. ALEXANDER, Mr. BENNETT, Mr. BURNS, Mr. HATCH, Mr. CHAMBLISS, Mr. CARPER, and Mr. SALAZAR) proposed an amendment to the bill S. 1783, to amend the Employee Retirement Income Security Act of 1974 and the Internal Revenue Code of 1986 to reform the pension funding rules, and for other purposes; as follows:


Strike section 403 and insert the following:
SEC. 403. SPECIAL FUNDING RULES FOR PLANS MAINTAINED BY COMMERCIAL AIRLINES THAT ARE AMENDED TO CEASE FUTURE BENEFIT ACCRUALS.
(a) In General.--If an election is made to have this section apply to an eligible plan--
(1) in the case of any applicable plan year beginning before January 1, 2007, the plan shall not have an accumulated funding deficiency for purposes of section 302 of the Employee Retirement Income Security Act of 1974 and sections 412 and 4971 of the Internal Revenue Code of 1986 if contributions to the plan for the plan year are not less than the minimum required contribution determined under subsection (d) for the plan for the plan year, and
(2) in the case of any applicable plan year beginning on or after January 1, 2007, the minimum required contribution determined under sections 303 of such Act and 430 of such Code shall, for purposes of sections 302 and 303 of such Act and sections 412, 430, and 4971 of such Code, be equal to the minimum required contribution determined under subsection (d) for the plan for the plan year.
(b) Eligible Plan.--For purposes of this section--
(1) IN GENERAL.--The term ``eligible plan'' means a defined benefit plan (other than a multiemployer plan) to which sections 302 of such Act and 412 of such Code applies--
(A) which is sponsored by an employer--
(i) which is a commercial airline passenger airline, or
(ii) the principal business of which is providing catering services to a commercial passenger airline, and
(B) with respect to which the requirements of paragraphs (2) and (3) are met.
(2) ACCRUAL RESTRICTIONS.--
(A) IN GENERAL.--The requirements of this paragraph are met if, effective as of the first day of the first applicable plan year and at all times thereafter while an election under this section is in effect, the plan provides that--
(i) the accrued benefit, any death or disability benefit, and any social security supplement described in the last sentence of section 411(a)(9) of such Code and section 204(b)(1)(G) of such Act, of each participant are frozen at the amount of such benefit or supplement immediately before such first day, and
(ii) all other benefits under the plan are eliminated,
but only to the extent the freezing or elimination of such benefits would have been permitted under section 411(d)(6) of such Code and section 204(g) of such Act if they had been implemented by a plan amendment adopted immediately before such first day.
(B) INCREASES IN SECTION 415 LIMITS DISREGARDED.--If a plan provides that an accrued benefit of a participant which has been subject to any limitation under section 415 of such Code will be increased if such limitation is increased, the plan shall not be treated as meeting the requirements of this paragraph unless, effective as of the first day of the first applicable plan year and at all times thereafter while an election under this section is in effect, the plan provides that any such
increase shall not take effect. A plan shall not fail to meet the requirements of section 411(d)(6) of such Code and section 204(g) of such Act solely because the plan is amended to meet the requirements of this subparagraph.
(3) RESTRICTION ON APPLICABLE BENEFIT INCREASES.--
(A) IN GENERAL.--The requirements of this paragraph are met if no applicable benefit increase takes effect at any time during the period beginning on July 26, 2005, and ending on the day before the first day of the first applicable plan year.
(B) APPLICABLE BENEFIT INCREASE.--For purposes of this paragraph, the term ``applicable benefit increase'' means, with respect to any plan year, any increase in liabilities of the plan by plan amendment (or otherwise provided in regulations provided by the Secretary) which, but for this paragraph, would occur during the plan year by reason of--
(i) any increase in benefits,
(ii) any change in the accrual of benefits, or
(iii) any change in the rate at which benefits become nonforfeitable under the plan.
(4) EXCEPTION FOR IMPUTED DISABILITY SERVICE.--Paragraphs (2) and (3) shall not apply to any accrual or increase with respect to imputed service provided to a participant during any period of the participant's disability occurring on or after the effective date of the plan amendment providing the restrictions under paragraph (2) if the participant--
(A) was receiving disability benefits as of such date, or
(B) was receiving sick pay and subsequently determined to be eligible for disability benefits as of such date.
(c) Elections and Related Terms.--
(1) IN GENERAL.--A plan sponsor shall make the election under subsection (a) at such time and in such manner as the Secretary of the Treasury may prescribe. Except as provided in subsection (h)(5), such election, once made, may be revoked only with the consent of such Secretary.
(2) YEARS FOR WHICH ELECTION MADE.--
(A) IN GENERAL.--The plan sponsor may select the first plan year to which the election under subsection (a) applies from among plan years ending after the date of the election. The election shall apply to such plan year and all subsequent years.
(B) ELECTION OF NEW PLAN YEAR.--The plan sponsor may specify a new plan year in the election under subsection (a) and the plan year of the plan may be changed to such new plan year without the approval of the Secretary of the Treasury.
(3) APPLICABLE PLAN YEAR.--The term ``applicable plan year'' means each plan year to which the election under subsection (a) applies under paragraph (1).
(d) Minimum Required Contribution.--
(1) IN GENERAL.--In the case of any applicable plan year during the amortization period, the minimum required contribution shall be the amount necessary to amortize the unfunded liability of the plan, determined as of the first day of the plan year, in equal annual installments (until fully amortized) over the remainder of the amortization period. Such amount shall be separately determined for each applicable plan year.
(2) YEARS AFTER AMORTIZATION PERIOD.--In the case of any plan year beginning after the end of the amortization period, section 302(a)(2)(A) of such Act and section 412(a)(2)(A) of such Code shall apply to such plan, but the prefunding balance as of the first day of the first of such years under section 303(f) of such Act and section 430(f) of such Code shall be zero.
(3) DEFINITIONS.--For purposes of this section--
(A) UNFUNDED LIABILITY.--The term ``unfunded liability'' means the unfunded accrued liability under the plan, determined under the unit credit funding method.
(B) AMORTIZATION PERIOD.--The term ``amortization period'' means the 20-plan year period beginning with the first applicable plan year.
(4) OTHER RULES.--In determining the minimum required contribution and amortization amount under this subsection--
(A) the provisions of section 302(c)(3) of such Act and section 412(c)(3) of such Code, as in effect before the date of enactment of this section, shall apply,
(B) the rate of interest under section 302(b) of such Act and section 412(b) of such Code, as so in effect, shall be used for all calculations requiring an interest rate, and
(C) the value of plan assets shall be equal to their fair market value.
(5) SPECIAL RULE FOR CERTAIN PLAN SPINOFFS.--For purposes of subsection (a), if, with respect to any eligible plan to which this subsection applies--
(A) any applicable plan year includes the date of the enactment of this Act,
(B) a plan was spun off from the eligible plan during the plan year but before such date of enactment,

the minimum required contribution under subsection (a)(1) for the eligible plan for such applicable plan year shall be determined as if the plans were a single plan for that plan year (based on the full 12-month plan year in effect prior to the spin-off). The employer shall designate the allocation of the minimum required contribution between such plans for the applicable plan year and direct the appropriate reallocation between the plans of any contributions for the applicable plan year.
(e) Funding Standard Account and Prefunding Balance.--Any charge or credit in the funding standard account under section 302 of such Act or section 412 of such Code, and any prefunding balance under section 303 of such Act or section 430 of such Code, as of the day before the first day of the first applicable plan year, shall be reduced to zero.
(f) Amendments to Other Provisions.--
(1) QUALIFICATION REQUIREMENT.--Section 401(a)(36) of the Internal Revenue Code of 1986, as added by section 402 of this Act, is amended by adding at the end the following: ``This paragraph shall also apply to any plan during any period during which an amortization schedule under section 403 of the Pension Security and Transparency Act of 2005 is in effect.''
(2) PBGC LIABILITY LIMITED.--Section 4022 of the Employee Retirement Income Security Act of 1974, as amended by this Act, is amended by adding at the end the following new subsection:
``(h) Special Rule for Plans Electing Certain Funding Requirements.--During any period in which an election by a plan under section 403 of the Pension Security and Transparency Act of 2005 is in effect, then this section and section 4044(a)(3) shall be applied by treating the first day of the first applicable plan year as the termination date of the plan. This subsection shall not apply to any plan for which an election under section 403(h) of such Act is in effect.''.
(3) LIMITATION ON DEDUCTIONS UNDER CERTAIN PLANS.--Section 404(a)(7)(C)(iii) of the Internal Revenue Code of 1986, as added by this Act, is amended by adding at the end the following new sentence: ``This clause shall also apply to any plan for a plan year if an election under section 403 of the Pension Security and Transparency Act of 2005 is in effect for such year.''
(4) NOTICE.--In the case of a plan amendment adopted in order to comply with this section, any notice required under section 204(h) of such Act or section 4980F(e) of such Code shall be provided within 15 days of the effective date of such plan amendment. This subsection shall not apply to any plan unless such plan is maintained pursuant to one or more collective bargaining agreements between employee representatives and 1 or more employers.
(g) Special Rules for Termination of Eligible Plans.--During any period an election is in effect under this section with respect to an eligible plan, the Pension Benefit Guaranty Corporation shall, before it seeks or approves a termination of such plan under section 4041(c) or 4042 of the Employee Retirement Income Security Act of 1974--
(1) make a determination under section 4041(c)(4) or 4042(i) of such Act whether the termination would be necessary if the Secretary of the Treasury were to enter into an agreement under section 4047(a) of such Act which provides an alternative funding agreement to replace the amortization schedule under this section, and
(2) if the Corporation determines such an agreement would make such termination unnecessary, take all necessary actions to ensure the agreement is entered into.

The Pension Benefit Guaranty Corporation shall make the determination under paragraph (1) within 90 days of receiving all information needed in connection with a request for a termination (or if no such request is made, within 90 days of consideration of the termination by the Corporation).
(h) Certain Benefit Accruals and Increases Allowed if Additional Contributions Made To Cover Costs.--
(1) IN GENERAL.--If an employer elects the application of this subsection--
(A) the requirements of paragraphs (2) and (3) of subsection (b) shall not apply with respect to any eligible plan maintained by the employer and specified in the election, and
(B) the minimum required contribution under subsection (d) for any plan year with respect to the plan shall be increased by the amounts described in paragraphs (2) and (3).

Any liabilities and assets taken into account under this subsection shall not be taken into account in determining the unfunded liability of the plan for purposes of subsection (d).
(2) CURRENT FUNDING OF ACCRUALS AND INCREASES.--The amount determined under this paragraph for any plan year is the target normal cost which would occur under section 303(b) of such Act and 430(b) of such Code if--
(A) any benefit accrual, or benefit increase taking effect, during the plan year by reason of this subsection were treated as having been accrued or earned during the plan year, and
(B) the plan were treated as if it were in at-risk status.
(3) FUNDING MUST BE MAINTAINED.--The amount determined under this paragraph for any plan year is the amount of any increase in the shortfall amortization charge which would occur under section 303(c) of such Act and 430(c) of such Code if--
(A) the funding target were determined by only taking into account benefits to which paragraph (2) applied for preceding plan years,
(B) the only assets taken into account were the contributions required under this paragraph and paragraph (2) for preceding plan years (and any earnings thereon),
(C) the amortization period included only the plan year,
(D) the transition rule under section 303(c)(4)(B) of such Act and section 430(c)(4)(B) of such Code did not apply, and
(E) the plan were treated as if it were in at-risk status.
(4) SPECIAL RULES FOR YEARS BEFORE 2007.--Notwithstanding any other provision of this Act, in the case of an applicable plan year of an eligible plan to which this subsection applies which begins before January 1, 2007, in determining the amounts described in paragraphs (2) and (3) for such plan year--
(A) the provisions of, and amendments made by, sections 101, 102, 111, and 112 shall apply to such plan year, except that
(B) the interest rate used under section 303 of such Act and section 430 of such Code for purposes of applying paragraphs (2) and (3) to such plan year shall be the interest rate determined under section 302(b)(5) of such Act and section 412(b)(5) of such Code, as in effect for plan years beginning in 2005.
(5) ELECTION OUT OF SECTION.--An employer maintaining an eligible plan to which this subsection applies may make a one-time election with respect to any applicable plan year not to have this section apply to such plan year and all subsequent plan years. Subject to subsection (d)(2), the minimum required contribution under section 303 of such Act and 430 of such Code for all such plan years shall be determined without regard to this section.
(i) Exclusion of Certain Employees From Minimum Coverage Requirements.--
(1) IN GENERAL.--Section 410(b)(3) of such Code is amended by striking the last sentence and inserting the following: ``For purposes of subparagraph (B), management pilots who are not represented in accordance with title II of the Railway Labor Act shall be treated as covered by a collective bargaining agreement described in such subparagraph if the management pilots manage the flight operations of air pilots who are so represented and the management pilots are, pursuant to the terms
of the agreement, included in the group of employees benefitting under the trust described in such subparagraph. Subparagraph (B) shall not apply in the case of a plan which provides contributions or benefits for employees whose principal duties are not customarily performed aboard an aircraft in flight (other than management pilots described in the preceding sentence).''
(2) EFFECTIVE DATE.--The amendment made by this subsection shall apply to years beginning before, on, or after the date of the enactment of this Act.
(j) Effective Date.--Except as otherwise provided in this section, the amendments made by this section shall apply to plan years ending after the date of the enactment of this Act.


(As printed in the Congressional Record for the Senate on Nov 16, 2005.)
select this voteS. Amdt. 2583Akaka, Daniel [D-HI]November 16, 2005Passed by roll call vote on November 16, 2005.

To compute the actuarial value of monthly benefits in the form of a life annuity commencing at age 60 for certain airline pilots.

Show amendment details

0 Organizations Supported and 0 Opposed

Organizations that took a position on
Pension Security and Transparency Act of 2005: Amendment SA 2582 agreed to in Senate by Voice Vote.

0 organizations supported this amendment

0 organizations opposed this amendment

Need proof?

View citations of support and opposition

Includes reported contributions to congressional campaigns of Senators in office on day of vote, from interest groups invested in the vote according to MapLight, January 1, 2001 – December 31, 2006.
Contributions data source: OpenSecrets.org

Add Data Filters:

Legislator Filters
Legislator Filters
NamePartyState$ From Interest Groups
That Supported
$ From Interest Groups
That Opposed
Vote
Daniel K. AkakaDHI$0$0Yes
Andrew Lamar AlexanderRTN$0$0Yes
Alan Wayne AllardRCO$0$0Yes
George AllenRVA$0$0Yes
Max BaucusDMT$0$0Yes
Birch "Evan" BayhDIN$0$0Yes
Bob BennettRUT$0$0Yes
Joe BidenDDE$0$0Yes
Jesse "Jeff" BingamanDNM$0$0Yes
Christopher "Kit" BondRMO$0$0Yes
Barbara BoxerDCA$0$0Yes
Sam BrownbackRKS$0$0Yes
Jim BunningRKY$0$0Yes
Conrad BurnsRMT$0$0Yes
Richard BurrRNC$0$0Yes
Robert ByrdDWV$0$0Yes
Maria CantwellDWA$0$0Yes
Tom CarperDDE$0$0Yes
Lincoln ChafeeRRI$0$0Yes
Clarence Saxby ChamblissRGA$0$0Yes
Hillary ClintonDNY$0$0Yes
Tom CoburnROK$0$0Yes
William Thad CochranRMS$0$0Yes
Norm ColemanRMN$0$0Yes
Susan M. CollinsRME$0$0Yes
Gaylord Kent ConradDND$0$0Yes
John CornynRTX$0$0Yes
Jon CorzineDNJ$0$0Yes
Larry CraigRID$0$0Yes
Mike CrapoRID$0$0Yes
Mark DaytonDMN$0$0Yes
Jim DeMintRSC$0$0Yes
Mike DeWineROH$0$0Yes
Chris DoddDCT$0$0Yes
Mary Elizabeth DoleRNC$0$0Yes
Pete DomeniciRNM$0$0Yes
Byron DorganDND$0$0Yes
Dick DurbinDIL$0$0Yes
John EnsignRNV$0$0Yes
Mike EnziRWY$0$0Yes
Russ FeingoldDWI$0$0Yes
Dianne FeinsteinDCA$0$0Yes
Bill FristRTN$0$0Yes
Lindsey GrahamRSC$0$0Yes
Chuck GrassleyRIA$0$0Yes
Judd GreggRNH$0$0Yes
Chuck HagelRNE$0$0Yes
Tom HarkinDIA$0$0Yes
Orrin G. HatchRUT$0$0Yes
Kay Bailey HutchisonRTX$0$0Yes
Jim InhofeROK$0$0Yes
Dan InouyeDHI$0$0Yes
Johnny IsaksonRGA$0$0Yes
Jim JeffordsIVT$0$0Yes
Tim JohnsonDSD$0$0Yes
Ted KennedyDMA$0$0Yes
John F. KerryDMA$0$0Yes
Herb KohlDWI$0$0Yes
Jon KylRAZ$0$0Yes
Mary L. LandrieuDLA$0$0Yes
Frank R. LautenbergDNJ$0$0Yes
Patrick J. LeahyDVT$0$0Yes
Carl LevinDMI$0$0Yes
Joe LiebermanICT$0$0Yes
Blanche LincolnDAR$0$0Yes
Chester Trent LottRMS$0$0Yes
Dick LugarRIN$0$0Yes
Mel MartinezRFL$0$0Yes
John McCainRAZ$0$0Yes
Addison "Mitch" McConnellRKY$0$0Yes
Barbara A. MikulskiDMD$0$0Yes
Lisa MurkowskiRAK$0$0Yes
Patty MurrayDWA$0$0Yes
Earl "Ben" NelsonDNE$0$0Yes
Clarence "Bill" NelsonDFL$0$0Yes
Barack ObamaDIL$0$0Yes
Mark L. PryorDAR$0$0Yes
John "Jack" ReedDRI$0$0Yes
Harry ReidDNV$0$0Yes
Charles "Pat" RobertsRKS$0$0Yes
John "Jay" RockefellerDWV$0$0Yes
Ken SalazarDCO$0$0Yes
Rick SantorumRPA$0$0Yes
Paul SarbanesDMD$0$0Yes
Chuck SchumerDNY$0$0Yes
Jeff SessionsRAL$0$0Yes
Richard C. ShelbyRAL$0$0Yes
Gordon SmithROR$0$0Yes
Olympia J. SnoweRME$0$0Yes
Arlen SpecterDPA$0$0Yes
Debbie StabenowDMI$0$0Yes
Ted StevensRAK$0$0Yes
John SununuRNH$0$0Yes
Jim TalentRMO$0$0Yes
Craig ThomasRWY$0$0Yes
John ThuneRSD$0$0Yes
David VitterRLA$0$0Yes
George VoinovichROH$0$0Yes
John WarnerRVA$0$0Yes
Ron WydenDOR$0$0Yes

Interest Groups that supported this amendment

$ Donated

Interest Groups that opposed this amendment

$ Donated
Loading…
Date Range of Contributions
Enter a custom date range