115th CONGRESS 2d Session |
To amend the Internal Revenue Code of 1986 and the Employee Retirement Income Security Act of 1974 to provide alternative minimum funding rules for certain single-employer plans maintained by a community newspaper.
July 16, 2018
Mr. Paulsen (for himself, Mr. Reichert, Ms. DelBene, and Mr. Pearce) introduced the following bill; which was referred to the Committee on Education and the Workforce, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned
To amend the Internal Revenue Code of 1986 and the Employee Retirement Income Security Act of 1974 to provide alternative minimum funding rules for certain single-employer plans maintained by a community newspaper.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
This Act may be cited as the “Save Community Newspaper Act of 2018”.
SEC. 2. Special rules for minimum funding standards for community newspaper plans.
(a) Amendment to Internal Revenue Code of 1986.—Section 430 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:
“(m) Special rules for community newspaper plans.—
“(1) IN GENERAL.—The plan sponsor of a community newspaper plan under which no participant has had the participant's accrued benefit increased (whether because of service or compensation) after December 31, 2017, may elect to have the alternative standards described in paragraph (3) apply to such plan, and any plan sponsored by any member of the same controlled group, for purposes of this section for plan years beginning with any plan year in effect on or beginning after the date of the enactment of this subsection.
“(2) ELECTION.—An election under paragraph (1) shall be made at such time and in such manner as prescribed by the Secretary. Such election, once made with respect to a plan year, shall apply to all subsequent plan years unless revoked with the consent of the Secretary.
“(3) ALTERNATIVE MINIMUM FUNDING STANDARDS.—The alternative standards described in this paragraph are the following:
“(i) IN GENERAL.—Notwithstanding subsection (h)(2)(C) and except as provided in clause (ii), the first, second, and third segment rates in effect for any month for purposes of this section shall be 8 percent.
“(ii) NEW BENEFIT ACCRUALS.—Notwithstanding subsection (h)(2), for purposes of determining the funding target and normal cost of a plan for any plan year, the present value of any benefits accrued or earned under the plan for a plan year with respect to which an election under paragraph (1) is in effect shall be determined on the basis of the U.S. Treasury obligation yield curve for the day that is the valuation date of such plan for such plan year.
“(iii) U.S. TREASURY OBLIGATION YIELD CURVE.—For purposes of this subsection, the term ‘U.S. Treasury obligation yield curve’ means, with respect to any day, a yield curve which shall be prescribed by the Secretary for such day on interest-bearing obligations of the United States.
“(B) SHORTFALL AMORTIZATION BASE.—
“(i) PREVIOUS SHORTFALL AMORTIZATION BASES.—The shortfall amortization bases determined under subsection (c)(3) for all plan years preceding the first plan year to which the election under paragraph (1) applies (and all shortfall amortization installments determined with respect to such bases) shall be reduced to zero under rules similar to the rules of subsection (c)(6).
“(ii) NEW SHORTFALL AMORTIZATION BASE.—Notwithstanding subsection (c)(3), the shortfall amortization base for the first plan year to which the election under paragraph (1) applies shall be the funding shortfall of such plan for such plan year (determined using the interest rates as modified under subparagraph (A)).
“(C) DETERMINATION OF SHORTFALL AMORTIZATION INSTALLMENTS.—
“(i) 30-YEAR PERIOD.—Subparagraphs (A) and (B) of subsection (c)(2) shall be applied by substituting ‘30-plan-year’ for ‘7-plan-year’ each place it appears.
“(ii) NO SPECIAL ELECTION.—The election under subparagraph (D) of subsection (c)(2) shall not apply to any plan year to which the election under paragraph (1) applies.
“(D) EXEMPTION FROM AT-RISK TREATMENT.—Subsection (i) shall not apply.
“(4) COMMUNITY NEWSPAPER PLAN.—For purposes of this subsection—
“(A) IN GENERAL.—The term ‘community newspaper plan’ means a plan to which this section applies maintained by an employer which, as of December 31, 2017—
“(i) publishes and distributes daily, either electronically or in printed form, 1 or more community newspapers in a single State,
“(ii) is not a company the stock of which is publicly traded (on a stock exchange or in an over-the-counter market), and is not controlled, directly or indirectly, by such a company,
“(iii) is controlled, directly or indirectly—
“(I) by 1 or more persons residing primarily in the State in which the community newspaper is published,
“(II) for not less than 30 years by individuals who are members of the same family,
“(III) by a trust created or organized in the State in which the community newspaper is published, the sole trustees of which are persons described in subclause (I) or (II),
“(IV) by an entity which is described in section 501(c)(3) and exempt from taxation under section 501(a), which is organized and operated in the State in which the community newspaper is published, and the primary purpose of which is to benefit communities in such State, or
“(V) a combination of persons described in subclause (I), (III), or (IV), and
“(iv) does not control, directly or indirectly, any newspaper in any other State.
“(B) COMMUNITY NEWSPAPER.—The term ‘community newspaper’ means a newspaper which primarily serves a metropolitan statistical area, as determined by the Office of Management and Budget, with a population of not less than 100,000.
“(C) CONTROL.—A person shall be treated as controlled by another person if such other person possesses, directly or indirectly, the power to direct or cause the direction and management of such person (including the power to elect a majority of the members of the board of directors of such person) through the ownership of voting securities.”.
(b) Amendment to Employee Retirement Income Security Act of 1974.—Section 303 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1083) is amended by adding at the end the following new subsection:
“(m) Special rules for community newspaper plans.—
“(1) IN GENERAL.—The plan sponsor of a community newspaper plan under which no participant has had the participant's accrued benefit increased (whether because of service or compensation) after December 31, 2017, may elect to have the alternative standards described in paragraph (3) apply to such plan, and any plan sponsored by any member of the same controlled group, for purposes of this section for plan years beginning with any plan year in effect on or beginning after the date of the enactment of this subsection.
“(2) ELECTION.—An election under paragraph (1) shall be made at such time and in such manner as prescribed by the Secretary of the Treasury. Such election, once made with respect to a plan year, shall apply to all subsequent plan years unless revoked with the consent of the Secretary of the Treasury.
“(3) ALTERNATIVE MINIMUM FUNDING STANDARDS.—The alternative standards described in this paragraph are the following:
“(i) IN GENERAL.—Notwithstanding subsection (h)(2)(C) and except as provided in clause (ii), the first, second, and third segment rates in effect for any month for purposes of this section shall be 8 percent.
“(ii) NEW BENEFIT ACCRUALS.—Notwithstanding subsection (h)(2), for purposes of determining the funding target and normal cost of a plan for any plan year, the present value of any benefits accrued or earned under the plan for a plan year with respect to which an election under paragraph (1) is in effect shall be determined on the basis of the U.S. Treasury obligation yield curve for the day that is the valuation date of such plan for such plan year.
“(iii) U.S. TREASURY OBLIGATION YIELD CURVE.—For purposes of this subsection, the term ‘U.S. Treasury obligation yield curve’ means, with respect to any day, a yield curve which shall be prescribed by the Secretary for such day on interest-bearing obligations of the United States.
“(B) SHORTFALL AMORTIZATION BASE.—
“(i) PREVIOUS SHORTFALL AMORTIZATION BASES.—The shortfall amortization bases determined under subsection (c)(3) for all plan years preceding the first plan year to which the election under paragraph (1) applies (and all shortfall amortization installments determined with respect to such bases) shall be reduced to zero under rules similar to the rules of subsection (c)(6).
“(ii) NEW SHORTFALL AMORTIZATION BASE.—Notwithstanding subsection (c)(3), the shortfall amortization base for the first plan year to which the election under paragraph (1) applies shall be the funding shortfall of such plan for such plan year (determined using the interest rates as modified under subparagraph (A)).
“(C) DETERMINATION OF SHORTFALL AMORTIZATION INSTALLMENTS.—
“(i) 30-YEAR PERIOD.—Subparagraphs (A) and (B) of subsection (c)(2) shall be applied by substituting ‘30-plan-year’ for ‘7-plan-year’ each place it appears.
“(ii) NO SPECIAL ELECTION.—The election under subparagraph (D) of subsection (c)(2) shall not apply to any plan year to which the election under paragraph (1) applies.
“(D) EXEMPTION FROM AT-RISK TREATMENT.—Subsection (i) shall not apply.
“(4) COMMUNITY NEWSPAPER PLAN.—For purposes of this subsection—
“(A) IN GENERAL.—The term ‘community newspaper plan’ means a plan to which this section applies maintained by an employer which, as of December 31, 2017—
“(i) publishes and distributes daily, either electronically or in printed form—
“(I) a community newspaper, or
“(II) 1 or more community newspapers in the same State,
“(ii) is not a company the stock of which is publicly traded (on a stock exchange or in an over-the-counter market), and is not controlled, directly or indirectly, by such a company,
“(iii) is controlled, directly or indirectly—
“(I) by 1 or more persons residing primarily in the State in which the community newspaper is published,
“(II) for not less than 30 years by individuals who are members of the same family,
“(III) by a trust created or organized in the State in which the community newspaper is published, the sole trustees of which are persons described in subclause (I) or (II),
“(IV) by an entity which is described in section 501(c)(3) of the Internal Revenue Code of 1986 and exempt from taxation under section 501(a) of such Code, which is organized and operated in the State in which the community newspaper is published, and the primary purpose of which is to benefit communities in such State, or
“(V) a combination of persons described in subclause (I), (III), or (IV), and
“(iv) does not control, directly or indirectly, any newspaper in any other State.
“(B) COMMUNITY NEWSPAPER.—The term ‘community newspaper’ means a newspaper which primarily serves a metropolitan statistical area, as determined by the Office of Management and Budget, with a population of not less than 100,000.
“(C) CONTROL.—A person shall be treated as controlled by another person if such other person possesses, directly or indirectly, the power to direct or cause the direction and management of such person (including the power to elect a majority of the members of the board of directors of such person) through the ownership of voting securities.
“(5) EFFECT ON PREMIUM RATE CALCULATION.—Notwithstanding any other provision of law or any regulation issued by the Pension Benefit Guaranty Corporation, in the case of a community newspaper plan which elects the application of the alternative standards described in paragraph (3), the additional premium under section 4006(a)(3)(E) shall be determined as if such election had not been made.”.
(c) Effective date.—The amendments made by this subsection shall apply to plan years in effect on or beginning after the date of the enactment of this Act.