Vote Smart's Synopsis:

Vote to pass a bill that establishes the Pension Rehabilitation Administration within the Department of the Treasury and a related trust fund to make loans to certain multiemployer-defined benefit pension plans.

Highlights:

• Establishes the Pension Rehabilitation Administration within the Department of the Treasury (Sec. 2). 

• Establishes a Pension Rehabilitation Trust Fund (Sec. 3).

• Authorizes the Pension Rehabilitation Administration to make loans to multiemployer plans which are defined benefit plans and which meet the following criteria (Sec. 4):

• Are in critical and declining status as of the date of enactment, or with respect to which a suspension of benefits has been approved under this act;

• As of such date of enactment, are in critical status, have a modified funded percentage of less than 40 percent, and have a ratio of active to inactive participants which is less than 2 to 5; or

• Are insolvent as of the date of enactment, if they became insolvent after December 16, 2014, and have been terminated.

• Defines “modified funded percentage” as the percentage equal to a fraction, the numerator of which is the current value of plan assets and the denominator of which is current liabilities (Sec. 2).

• Requires individuals applying for a loan through this act to take the following actions (Sec. 4):

• Demonstrate that the loan will enable the plan to avoid insolvency for at least a 30-year period, or in the case of a plan which is already insolvent, to emerge from insolvency within and avoid insolvency for the remainder of such period, and that the plan is reasonably expected to be able to pay benefits and the interest on the loan during such period and to accumulate sufficient funds to repay the principal when due; 

• Provide the plan’s most recently filed Form 5500 as of the date of application and any other information necessary to determine the loan amount; 

• Stipulate whether the plan is also applying for financial assistance under the Employee Retirement Income Security Act in combination with the loan to enable the plan to avoid insolvency and to pay benefits;

• State in what manner the loan proceeds will be invested, the person from whom any annuity contracts will be purchased, and the person who will be the investment manager for any portfolio implemented; and 

• Include any other information and certifications the Director of the Pension Rehabilitation Administration requires.

Full Bill Text

Full Bill Text