TREATMENT OF CERTAIN PLANS WHERE CESSATION OR CHANGE IN MEMBERSHIP OF A CONTROLLED GROUP.

SEC. 409. TREATMENT OF CERTAIN PLANS WHERE CESSATION OR CHANGE IN MEMBERSHIP OF A CONTROLLED GROUP.(a) In General.—Section 4041(b) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1341(b)) is amended by adding at the end the following new paragraph:“(5) Special rule for certain plans where cessation or change in membership of a controlled group.—“(A) In general.—Except as provided in subparagraph (B), if—“(i) there is transaction or series of transactions which result in a person ceasing to be a member of a controlled group, and“(ii) such person immediately before the transaction or series of transactions maintained a single-employer plan which is a defined benefit plan which is fully funded,then the interest rate used in determining whether the plan is sufficient for benefit liabilities or to otherwise assess plan liabilities for purposes of this subsection or section 4042(a)(4) shall be not less than the interest rate used in determining whether the plan is fully funded.“(B) Limitations.—Subparagraph (A) shall not apply to any transaction or series of transactions unless—“(i) any employer maintaining the plan immediately before or after such transaction or series of transactions—“(I) has an outstanding senior unsecured debt instrument which is rated investment grade by each of the nationally recognized statistical rating organizations for corporate bonds that has issued a credit rating for such instrument, or“(II) if no such debt instrument of such employer has been rated by such an organization but 1 or more of such organizations has made an issuer credit rating for such employer, all such organizations which have so rated the employer have rated such employer investment grade, and“(ii) the employer maintaining the plan after the transaction or series of transactions employs at least 20 percent of the employees located in the United States who were employed by such employer immediately before the transaction or series of transactions.“(C) Fully funded.—For purposes of subparagraph (A), a plan shall be treated as fully funded with respect to any transaction or series of transactions if—“(i) in the case of a transaction or series of transactions which occur in a plan year beginning before January 1, 2008, the funded current liability percentage determined under section 302(d) for the plan year is at least 100 percent, and“(ii) in the case of a transaction or series of transactions which occur in a plan year beginning on or 120 STAT. 934 after such date, the funding target attainment percentage determined under section 303 is, as of the valuation date for such plan year, at least 100 percent.“(D) 2 year limitation.—Subparagraph (A) shall not apply to any transaction or series of transactions if the plan referred to in subparagraph (A)(ii) is terminated under section 4041(c) or 4042 after the close of the 2-year period beginning on the date on which the first such transaction occurs.”.(b) Effective Date.—The amendments made by this section shall apply to any transaction or series of transactions occurring on and after the date of the enactment of this Act.