INCREASE IN PREMIUM RATES.

SEC. 9331. INCREASE IN PREMIUM RATES. (a) General rule.— Clause (i) of section 4006(a)(3)(A) of ERISA (29 U.S.C. 1306(a)(3)(A)) is amended by striking out “for plan years beginning after December 31, 1985, an amount equal to $8.50” and inserting in lieu thereof “for plan years beginning after December 31, 1987, an amount equal to the sum of $16 plus the additional premium (if any) determined under subparagraph (E)”. (b) Determination Of Additional Premium.— Paragraph (3) of section 4006(a) of ERISA (29 U.S.C. 1306(a)(3)) is amended by adding at the end thereof the following new subparagraph: “(E) (i) The additional premium determined under this subparagraph with respect to any plan for any plan year shall be an amount equal to the amount determined under clause (ii) divided by the number of participants in such plan as of the close of the preceding plan year. “(ii) The amount determined under this clause for any plan year shall be an amount equal to $6.00 for each $1,000 (or fraction thereof) of unfunded vested benefits under the plan as of the close of the preceding plan year. “(iii) For purposes of clause (ii)— “(I) Except as provided in subclause (II), the term ‘unfunded vested benefits’ means the amount which would be the unfunded current liability (within the meaning of section 302(d)(8)(A)) if only vested benefits were taken into account. “(II) The interest rate used in valuing vested benefits for purposes of subclause (I) shall be equal to 80 percent of the annual yield on 30-year Treasury securities for the month preceding the month in which the plan year begins. 101 STAT. 1330–368 “(iv) (I) Except as provided in this clause, the aggregate increase in the premium payable with respect to any participant by reason of this subparagraph shall not exceed $34. “(II) If an employer made contributions to a plan during 1 or more of the 5 plan years preceding the 1st plan year to which this subparagraph applies in an amount not less than the maximum amount allowable as a deduction with respect to such contributions under section 404 of such Code, the dollar amount in effect under subclause (I) for the 1st 5 plan years to which this subparagraph applies shall be reduced by $3 for each plan year for which such contributions were made in such amount. (c) Liability for Premium.— (1) In general.— Section 4007 of ERISA (29 U.S.C. 1307) is amended by striking out “plan administrator” each place it appears and inserting in lieu thereof “designated payor”. (2) Designated payor.— Section 4007 of ERISA (29 U.S.C. 1307) is amended by adding at the end thereof the following new subsection: “(e) (1) For purposes of this section, the term ‘designated payor’ means— “(A) the contributing sponsor or plan administrator in the case of a single-employer plan, and “(B) the plan administrator in the case of a multiemployer plan. “(2) If the contributing sponsor of any single-employer plan is a member of a controlled group, each member of such group shall be jointly and severally liable for any premiums required to be paid by such contributing sponsor. For purposes of the preceding sentence, the term 'controlled group' means any group treated as a single employer under subsection (b), (c), (m), or (o) of section 414 of the Internal Revenue Code of 1986.” (d) Deposit of Premiums Into Separate Revolving Fund.— Section 4005 of ERISA (relating to establishment of Pension Benefit Guaranty funds) (29 U.S.C. 1305) is amended by redesignating subsections (f) and (g) as subsections (g) and (h) and by inserting after subsection (e) the following new subsection: “(f) (1) A seventh fund shall be established and credited with— “(A) premiums, penalties, and interest charges collected under section 4006(a)(3)(A)(i) (not described in subparagraph (B)) to the extent attributable to the amount of the premium in excess of $8.50, “(B) premiums, penalties, and interest charges collected under section 4006(a)(3)(E), and “(C) earnings on investments of the fund or on assets credited to the fund. “(2) Amounts in the fund shall be available for transfer to other funds established under this section with respect to a single-employer plan but shall not be available to pay— “(A) administrative costs of the corporation, or “(B) benefits under any plan which was terminated before October 1, 1988, unless no other amounts are available for such payment. “(3) The corporation may invest amounts of the fund in such obligations as the corporation considers appropriate.” (e) Conforming Amendments.— Section 4006(c)(1)(A) of ERISA (29 U.S.C. 1306(c)(1)(A)) is amended by striking out “and” at the end of clause (i), by inserting “and before January 1, 1986,” after “after101 STAT. 1330–369 December 31, 1977,”, and by adding at the end thereof the following new clause: “(iii) with respect to each plan year beginning after December 31, 1985, and before January 1, 1988, an amount equal to $8.50 for each individual who was a participant in such plan during the plan year, and”. (f) Effective Date.— (1) In general.— The amendments made by this section shall apply to plan years beginning after December 31, 1987. (2) Separate accounting.— The amendments made by subsection (d) shall apply to fiscal years beginning after September 30, 1988.