STANDARDS FOR TERMINATION.

SEC. 9313. STANDARDS FOR TERMINATION. (a) Standard Termination Procedures Available Only When Assets Sufficient to Meet Benefit Liabilities.— (1) In general.— Subparagraph (D) of section 4041(b)(1) of ERISA (29 U.S.C. 1341(b)(1)(D)) is amended to read as follows: “(D) when the final distribution of assets occurs, the plan is sufficient for benefit liabilities (determined as of the termination date).” (2) Technical amendments.— (A) Paragraphs (2)(A), (2)(C), (2)(D), and (3) of section 4041(b) of ERISA (29 U.S.C. 1341(b)(2)(A), (2)(C), (2)(D), (3)) are each amended by striking out “benefit commitments” each place it appears and inserting in lieu thereof “benefit liabilities”. (B) Subparagraph (B) of section 4041(b)(2) of ERISA (29 U.S.C. 134ia))(2)(B)) is amended— (i) by striking out “the amount of such person’s benefit commitments (if any)” and inserting in lieu thereof “the amount of the benefit liabilities (if any) attributable to such person”; and (ii) by striking out “such benefit commitments” and inserting in lieu thereof “such benefit liabilities”. (C) (i) Subparagraph (A) of section 4041(b)(3) of ERISA (29 U.S.C. 1341(b)(3)(A)) is amended by striking out clauses (i) and (ii) and inserting in lieu thereof the following: “(i) purchase irrevocable commitments from an insurer to provide all benefit liabilities under the plan, or “(ii) in accordance with the provisions of the plan and any applicable regulations, otherwise fully provide all benefit liabilities under the plan.” (ii) Subparagraph (B) of section 4041(b)(3) of ERISA (29 U.S.C. 1341(b)(3)) is amended by striking out “so as to pay”101 STAT. 1330–365 and all that follows and inserting in lieu thereof “so as to pay all benefit liabilities under the plan”. (D) Paragraphs (2) and (3) of section 4041(c) of ERISA (29 U.S.C. 1341(c) (2), (3)) are each amended by striking out “benefit commitments” each place it appears (including in any heading) and inserting in lieu thereof “benefit liabilities”. (E) Paragraph (1) of section 4041(d) of ERISA (29 U.S.C. 1341(d)) is amended— (i) by striking out “no amount of unfunded benefit commitments” and inserting in lieu thereof “no amount of unfunded benefit liabilities”, and (ii) by striking out “BENEFIT COMMITMENTS” in the paragraph heading and inserting in lieu thereof “benefit liabilities”. (F) Paragraph (18) of section 4001(a) of ERISA (29 U.S.C. 1301(a)(18)) is amended to read as follows: “(18) ‘amount of unfunded benefit liabilities’ means, as of any date, the excess (if any) of— “(A) the value of the benefit liabilities under the plan (determined as of such date on the basis of assumptions prescribed by the corporation for purposes of section 4044), over “(B) the current value (as of such date) of the assets of the plan;”. (b) Criteria for Distress Termination.— (1) Applicability to all members of controlled group.— Section 4041(c)(2) of ERISA (29 U.S.C. 1341(c)(2)) is amended— (A) in subparagraph (B), by striking “a substantial member” in the matter preceding clause (i) and inserting “a member”; and (B) by striking subparagraph (C) and by redesignating subparagraph (D) as subparagraph (C). (2) Requirement of additional findings to qualify for distress termination based on reorganization in bankruptcy.— Section 4041(c)(2)(B)(ii)(III) of ERISA (29 U.S.C. 1341(c)(2)(B)(ii)(III)) is amended by striking “approves the termination” and inserting “determines that, unless the plan is terminated, such person will be unable to pay all its debts pursuant to a plan of reorganization and will be unable to continue in business outside the chapter 11 reorganization process and approves the termination”. (3) Clarification of date as of which employer must be in a bankruptcy proceeding to qualify for distress termination.— Clauses (i) and (ii) of section 4041(c)(2)(B) of ERISA (29 U.S.C. 1341(c)(2)(B) (i) and (ii)) are each amended by inserting “proposed” before “termination date”. (4) Treatment under distress tests of cases converted to liquidation.— Section 4041(c)(2)(B)(i)(I) of ERISA (29 U.S.C. 1341(c)(2)(B)(i)(I)) is amended by inserting before the comma at the end the following: “(or a case described in clause (ii) filed by or against such person has been converted, as of such date, to a case in which liquidation is sought)”. (5) Notice to corporation under reorganization distress test.— Section 4041(c)(2)(B)(ii) of ERISA (29 U.S.C 1341(c)(2)(B)(ii)) is amended— (A) in subclause (II), by striking “and” at the end; 101 STAT. 1330–366 (B) by redesignating subclause (III) as subclause (IV); (C) by inserting after subclause (II) the following new subclause: “(III) such person timely submits to the corporation any request for the approval of the bankruptcy court (or other appropriate court in a case under such similar law of a State or political subdivision) of the plan termination, and”; and (D) in subclause (IV) (as redesignated), by striking “(or other” and all that follows through subdivision) and inserting “(or such other appropriate court)”. (6) Arrangements for payment of liability by controlled groups.— Section 4067 of ERISA (29 U.S.C. 1367) is amended by striking “controlled groups who are” and inserting “controlled groups who are or may become”. (c) Effective Date.— The amendments made by this section shall apply with respect to plan terminations under section 4041 of ERISA with respect to which notices of intent to terminate are provided under section 4041(a)(2) of ERISA after December 17, 1987.