MODIFICATION OF FUNDING REQUIREMENTS FOR CERTAIN PLANS.

SEC. 1508. MODIFICATION OF FUNDING REQUIREMENTS FOR CERTAIN PLANS. (a) Funding Rules for Certain Plans.—Section 769 of the Retirement Protection Act of 1994 is amended by adding at the end the following new subsection: “(c) Transition Rules for Certain Plans.— “(1) In general.—In the case of a plan that— “(A) was not required to pay a variable rate premium for the plan year beginning in 1996; “(B) has not, in any plan year beginning after 1995 and before 2009, merged with another plan (other than a plan sponsored by an employer that was in 1996 within the controlled group of the plan sponsor); and “(C) is sponsored by a company that is engaged primarily in the interurban or interstate passenger bus service, the transition rules described in paragraph (2) shall apply for any plan year beginning after 1996 and before 2010. “(2) Transition rules.—The transition rules described in this paragraph are as follows: “(A) For purposes of section 412(1)(9)(A) of the Internal Revenue Code of 1986 and section 302(d)(9)(A) of the Employee Retirement Income Security Act of 1974— “(i) the funded current liability percentage for any plan year beginning after 1996 and before 2005 shall be treated as not less than 90 percent if for such plan year the funded current liability percentage is at least 85 percent, and “(ii) the funded current liability percentage for any plan year beginning after 2004 and before 2010 shall be treated as not less than 90 percent if for such plan year the funded current liability percentage satisfies the minimum percentage determined according to the following table:111 STAT. 1068 “In the case of a plan year beginning in: The minimum percentage is: 2005 86 percent 2006 87 percent 2007 88 percent 2008 89 percent 2009 and thereafter 90 percent. “(B) Sections 412(c)(7)(E)(i)(I) of such Code and 302(c)(7)(E)(i)(I) of such Act shall be applied— “(i) by substituting ‘85 percent’ for ‘90 percent’ for plan years beginning after 1996 and before 2005, and “(ii) by substituting the minimum percentage specified in the table contained in subparagraph (A)(ii) for ‘90 percent’ for plan years beginning after 2004 and before 2010. “(C) In the event the funded current liability percentage of a plan is less than 85 percent for any plan year beginning after 1996 and before 2005, the transition rules under subparagraphs (A) and (B) shall continue to apply to the plan if contributions for such a plan year are made to the plan in an amount equal to the lesser of— “(i) the amount necessary to result in a funded current liability percentage of 85 percent, or “(ii) the greater of— “(I) 2 percent of the plan’s current liability as of the beginning of such plan year, or “(II) the amount necessary to result in a funded current liability percentage of 80 percent as of the end of such plan year. For the plan year beginning in 2005 and for each of the 3 succeeding plan years, the transition rules under subparagraphs (A) and (B) shall continue to apply to the plan for such plan year only if contributions to the plan for such plan year equal at least the expected increase in current liability due to benefits accruing during such plan year.”. (b) Effective Date.—The amendment made by this section shall apply to plan years beginning after December 31, 1996.