 |
 |
 |
 |
|
 |
 |
2
LEGAL DISCLAIMER:
Information contained in this publication is not legal advice, and
should not be construed as legal advice. If you need legal advice upon which you can rely,
you should seek a legal opinion from your attorney.
Section 311 -
Optional use of 30-year amortization periods.
Currently,
multiemployer pension plans must amortize net experience losses over a 15-year
period. The Bill permits
plans to elect a 30-year amortization period for certain
losses incurred in either or both of the first 2 plan years ending on or after June 30,
2008. The 30-year amortization extension is not available unless the plan is
projected not to have a decrease in its funded percentage in 15 years. If a plan
elects the extended amortization periods, benefit increases are restricted for a two-
year period, unless the plan actuary certifies that increases are fully paid for by
additional contributions by the plan sponsor and certain funding levels are projected
to be met. The provision also extends the maximum smoothing period for
determining plan asset values from 5 years to 10 years for either or both of the first
2 plan years ending on or after June 30, 2008.
Section 312 -
Optional longer recovery periods for multiemployer plans in
endangered or critical status.
Under present law, certain underfunded
multiemployer pension plans must improve their funding levels over a 10-year
funding improvement period (15 years in the case of a seriously endangered plan)
or a 10-year rehabilitation period. WRERA permitted a 3-year extension of these
periods. The provision extends the WRERA relief so as to permit
up to a 5-year
extension of these periods (up to an additional 2 years for plans that elected
WRERA relief).
Section 313 -
Modification of certain amortization extensions under prior
law.
Makes changes to the determination
whether certain
funding-based
conditions relating to an amortization extension has been met. Plans with such
extensions may treat the return on plan assets for plan years that contain any of
the period from June 30, 2008 to October 31, 2008 as the interest rate used for
charges and credits to the plan’s funding standard account.
Section 314 -
Alternative default schedule for plans in endangered or
critical status. Under the PPA, a default contribution schedule applies in the case
of certain underfunded plans if the collective bargaining parties fail to reach
agreement on a contribution schedule. The Bill allows
the plan trustees to
elect to
use as the default schedule the contribution schedule that has been approved by
the bargaining parties and that covers at least 75 percent of the employees actively
participating in the plan. The provision is effective for designations of default
schedules on or after the date of enactment.
Section 315 - Transition rule for certifications of plan status. This provision
provides transition rules with respect to certifications of a plan’s funded status for
plans whose certifications are due after the date of enactment and for certain plans
whose most recent certification does not take into account an election to take
funding relief with respect to a plan year that begins on or after October 1, 2009.
We will monitor the progress of the Bill once the Senate reconvenes.
*
*
*