ENHANCING RETIREE HEALTH BENEFITS IN PENSION PLANS.

SEC. 606. ENHANCING RETIREE HEALTH BENEFITS IN PENSION PLANS.(a) Amendments to Internal Revenue Code of 1986.—(1) Extension of transfers of excess pension assets to retiree health accounts.—Paragraph (4) of section 420(b) is amended by striking “December 31, 2025” and inserting “December 31, 2032”. (2) De minimis transfer rule.—(A) In general.—Subsection (e) of section 420 is amended by adding at the end the following new paragraph:“(7) Special rule for de minimis transfers.—“(A) In general.—In the case of a transfer of an amount which is not more than 1.75 percent of the amount determined under paragraph (2)(A) by a plan which meets the requirements of subparagraph (B), paragraph (2)(B) 136 STAT. 5397 shall be applied by substituting ‘110 percent’ for ‘125 percent’. “(B) Two-year lookback requirement.—A plan is described in this subparagraph if, as of any valuation date in each of the 2 plan years immediately preceding the plan year in which the transfer occurs, the amount determined under paragraph (2)(A) exceeded 110 percent of the sum of the funding target and the target normal cost determined under section 430 for each such plan year.” . (B) Cost maintenance period.—Subparagraph (D) of section 420(c)(3) is amended by striking “5 taxable years” and inserting “5 taxable years (7 taxable years in the case of a transfer to which subsection (e)(7) applies)”. (C) Conforming amendments.—(i) Excess pension assets.—Clause (i) of section 420(f)(2)(B) is amended—(I) by striking “In general.—In” and inserting “In general.—“(I) Determination.—In” , (II) by striking “subsection (e)(2)” and inserting “subsection (e)(2)(B)”, and (III) by adding at the end the following new subclause:“(II) Special rule for collectively bargained transfers.—In determining excess pension assets for purposes of a collectively bargained transfer, subsection (e)(7) shall not apply.” . (ii) Minimum cost.—Subclause (I) of section 420(f)(2)(D)(i) is amended by striking “4th year” and inserting “4th year (the 6th year in the case of a transfer to which subsection (e)(7) applies)”. (b) Extension of Transfers of Excess Pension Assets to Retiree Health Accounts Under Employee Retirement Income Security Act of 1974.—(1) Definitions.—Section 101(e)(3) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1021(e)(3)) is amended by striking “(as in effect on the date of the enactment of the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015)” and inserting “(as in effect on the date of enactment of the SECURE 2.0 Act of 2022)”. (2) Use of assets.—Section 403(c)(1) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1103(c)(1)) is amended by striking “(as in effect on the date of the enactment of the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015)” and inserting “(as in effect on the date of enactment of the SECURE 2.0 Act of 2022)”. (3) Exemption.—Section 408(b)(13) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1108(b)(13)) is amended—(A) by striking “January 1, 2026” and inserting “January 1, 2033”; and (B) by striking “(as in effect on the date of the enactment of the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015)” and inserting “(as in effect on the date of enactment of the SECURE 2.0 Act of 2022)”.136 STAT. 5398 (c) Effective Date.—The amendments made by this section shall apply to transfers made after the date of the enactment of this Act.