Page:United States Statutes at Large Volume 120.djvu/1036

 PUBLIC LAW 109–280—AUG. 17, 2006

120 STAT. 1005

Subtitle D—Health and Medical Benefits SEC. 841. USE OF EXCESS PENSION ASSETS FOR FUTURE RETIREE HEALTH BENEFITS AND COLLECTIVELY BARGAINED RETIREE HEALTH BENEFITS.

(a) IN GENERAL.—Section 420 of the Internal Revenue Code of 1986 (relating to transfers of excess pension assets to retiree health accounts) is amended by adding at the end the following new subsection: ‘‘(f) QUALIFIED TRANSFERS TO COVER FUTURE RETIREE HEALTH COSTS AND COLLECTIVELY BARGAINED RETIREE HEALTH BENEFITS.— ‘‘(1) IN GENERAL.—An employer maintaining a defined benefit plan (other than a multiemployer plan) may, in lieu of a qualified transfer, elect for any taxable year to have the plan make— ‘‘(A) a qualified future transfer, or ‘‘(B) a collectively bargained transfer. Except as provided in this subsection, a qualified future transfer and a collectively bargained transfer shall be treated for purposes of this title and the Employee Retirement Income Security Act of 1974 as if it were a qualified transfer. ‘‘(2) QUALIFIED FUTURE AND COLLECTIVELY BARGAINED TRANSFERS.—For purposes of this subsection— ‘‘(A) IN GENERAL.—The terms ‘qualified future transfer’ and ‘collectively bargained transfer’ mean a transfer which meets all of the requirements for a qualified transfer, except that— ‘‘(i) the determination of excess pension assets shall be made under subparagraph (B), ‘‘(ii) the limitation on the amount transferred shall be determined under subparagraph (C), ‘‘(iii) the minimum cost requirements of subsection (c)(3) shall be modified as provided under subparagraph (D), and ‘‘(iv) in the case of a collectively bargained transfer, the requirements of subparagraph (E) shall be met with respect to the transfer. ‘‘(B) EXCESS PENSION ASSETS.— ‘‘(i) IN GENERAL.—In determining excess pension assets for purposes of this subsection, subsection (e)(2) shall be applied by substituting ‘120 percent’ for ‘125 percent’. ‘‘(ii) REQUIREMENT TO MAINTAIN FUNDED STATUS.— If, as of any valuation date of any plan year in the transfer period, the amount determined under subsection (e)(2)(B) (after application of clause (i)) exceeds the amount determined under subsection (e)(2)(A), either— ‘‘(I) the employer maintaining the plan shall make contributions to the plan in an amount not less than the amount required to reduce such excess to zero as of such date, or ‘‘(II) there is transferred from the health benefits account to the plan an amount not less than the amount required to reduce such excess to zero as of such date.

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26 USC 420.

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