SECTION 1. PROCEDURES GOVERNING RETIREE HEALTH BENEFITS.

    (a) In General.--Part 5 of subtitle B of title I of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 1131 et seq.) is 
amended by adding at the end the following new section:

``SEC. 516. PROCEDURES GOVERNING THE TERMINATION OR SUBSTANTIAL 
              REDUCTION OF RETIREE HEALTH BENEFITS.

    ``(a) Termination or Substantial Reduction of Retiree Health 
Benefits.--A plan or plan sponsor may terminate or substantially reduce 
retiree health benefits under an employee welfare benefit plan, or plan 
or plan sponsor payments in connection with such benefits only in 
accordance with the provisions of this section.
    ``(b) Proposal Requirement.--
            ``(1) Prior to terminating or substantially reducing 
        retiree health benefits or plan or plan sponsor payments in 
        connection with such benefits, a plan sponsor shall--
                    ``(A) petition a court of competent jurisdiction 
                for the appointment of an authorized representative for 
                the retirees whose benefits may be terminated or 
                substantially reduced;
                    ``(B) make a proposal to the authorized 
                representative of the retirees covered by the plan, 
                based on the most complete and reliable information 
                available at the time of such proposal, which assures 
                that all of the affected parties are treated fairly and 
                equitably; and
                    ``(C) provide, subject to subsection (c)(2), the 
                representative of the retirees with such relevant 
                information as is necessary to evaluate the proposal.
            ``(2) During the period beginning on the date of the making 
        of a proposal provided for in paragraph (1) and ending on the 
        date of the hearing provided for in subsection (c)(1), the plan 
        sponsor shall meet, at reasonable times, with the authorized 
        representative to confer in good faith in attempting to reach 
        mutually satisfactory modifications of such plan.
            ``(3) For purposes of this section the term `authorized 
        representative' means the authorized representative designated 
        pursuant to subparagraph (A) for persons receiving any retiree 
        benefits covered by a collective bargaining agreement or 
        subparagraph (B) in the case of persons receiving retiree 
        benefits not covered by such agreement.
                    ``(A) A labor organization shall be the authorized 
                representative of those persons receiving any retiree 
                benefits covered by any collective bargaining agreement 
                to which that labor organization is signatory, unless 
                (i) such labor organization elects not to serve as the 
                authorized representative of such person, or (ii) the 
                court, upon a motion by any participant or beneficiary, 
                after notice and hearing, determines that different 
                representation of such persons is appropriate. In cases 
                where the labor organization elects not to serve as the 
                authorized representative of those persons receiving 
                any retiree benefits covered by any collective 
                bargaining agreement to which that labor organization 
                is signatory, or in cases where the court finds 
                different representation of such persons appropriate, 
                the court, upon a motion by any participant or 
                beneficiary, and after notice and a hearing, shall 
                appoint an authorized representative of retired 
                employees if the plan or plan sponsor seeks to 
                terminate or substantially reduce the retiree benefits 
                or if the court otherwise determines that such 
                appointment is appropriate, from among such persons.
                    ``(B) The court, upon a motion by any participant 
                or beneficiary, and after notice and a hearing, shall 
                appoint an authorized representative of retired 
                employees if the plan or plan sponsor seeks to 
                terminate or substantially reduce the retiree benefits 
or if the court otherwise determines that it is appropriate, to appoint 
an authorized representative of those persons receiving any retiree 
benefits not covered by a collective bargaining agreement.
            ``(4) The court may order a plan sponsor to pay reasonable 
        expenses to the authorized representative.
    ``(c) Hearings.--
            ``(1) If an action is brought by any participant or 
        beneficiary to enjoin or otherwise modify such termination or 
        substantial reduction, the court without requirement of any 
        additional showing shall order the plan and plan sponsor to 
        maintain the retiree health benefits and payments at the level 
        in effect immediately before the termination or substantial 
        reduction while the action is pending in any court. No security 
        or other undertaking shall be required of any participant or 
        beneficiary as a condition for issuance of such relief. In 
        addition, the court shall schedule a hearing to be held not 
        later than fourteen days after the date of the filing of such 
        action. All interested parties may appear and be heard at such 
        hearing. Adequate notice shall be provided to such parties at 
        least ten days before the date of such hearings. The court may 
        extend the time for the commencement of such hearing for a 
        period not exceeding seven days where the circumstances of the 
        case, and the interests of justice require such extension, or 
        for additional periods of time to which the plan sponsor and 
        representative agree.
            ``(2) The court may enter such protective orders, 
        consistent with the need of the authorized representative of 
        the retiree to evaluate the proposal of the plan sponsor to 
        substantially reduce or terminate retiree health benefits or 
        plan or plan sponsor payments in connection with such benefits.
            ``(3) If retiree health benefits under an employee welfare 
        benefit plan or plan or plan sponsor payments in connection 
        with such benefits are to be or have been terminated or 
        substantially reduced, and an action is brought by any 
        participant or beneficiary to enjoin or otherwise modify such 
        termination or substantial reduction, the court shall take into 
        account extrinsic evidence to determine the intent of the plan.
            ``(4) If the terms of an employee welfare benefit plan, 
        summary plan description, or other materials distributed to 
        employees at any time before a participant's retirement or 
        disability, are silent or are ambiguous, either on their face 
        or after consideration of extrinsic evidence, as to whether 
        retiree health benefits and payments may be terminated or 
        substantially reduced for a participant and his or her 
        beneficiaries after the participant's retirement or disability, 
        then the benefits and payments shall not be terminated or 
        substantially reduced for the participant and his or her 
        beneficiaries unless the plan or plan sponsor establishes by a 
        preponderance of the evidence that the summary plan description 
        or other materials about retiree benefits--
                    ``(A) were distributed to the participant at least 
                90 days in advance of retirement or disability;
                    ``(B) did not promise retiree health benefits for 
                the lifetime of the participant and his or her spouse; 
                and
                    ``(C) clearly and specifically disclosed that the 
                plan allowed such termination or substantial reduction 
                as to the participant after the time of his or her 
                retirement or disability.
The disclosure described in subparagraph (C) must have been made 
prominently and in language which can be understood by the average plan 
participant.
            ``(5) The court shall approve a substantial reduction or 
        termination of retiree health benefits or plan or plan sponsor 
        payments in connection with such benefits only if the court 
        finds that--
                    ``(A) the collective bargaining agreement 
                explicitly provides for a substantial reduction or 
                termination of such benefits; or
                    ``(B)(i) the plan sponsor has, prior to the 
                hearing, made a proposal that fulfills the requirements 
                of subsection (b)(1);
                    ``(ii) the authorized representative of the 
                employees has refused to accept such proposal without 
                good cause; and
                    ``(iii) the balance of the equities clearly favors 
                substantially reducing or terminating retiree health 
                benefits or plan or plan sponsor payments in connection 
                with such benefits.
    ``(d) Retiree Health Benefits.--For the purposes of this section, 
the term `retiree health benefits' means health benefits (including 
coverage) which are provided to--
            ``(1) retired or disabled employees who, immediately before 
        the termination or substantial reduction, have a reasonable 
        expectation to receive such benefits upon retirement or 
        becoming disabled; and
            ``(2) their spouses or dependents.''.
    (b) Conforming Amendment.--The table of contents in section 1 of 
such Act is amended by inserting after the item relating to section 515 
the following new item:

``Sec. 516. Procedures governing termination and substantial reduction 
                            of retiree health benefits.''
    (c) Effective Date.--The amendments made by this section shall 
apply to actions relating to terminations or substantial reductions of 
retiree health benefits which are pending or brought, on or after 
August 1, 1996.
Amends the Employee Retirement Income Security Act of 1974 (ERISA) to establish procedures governing an employee benefit plan or plan sponsor's termination or substantial reduction of retiree health benefits. 
Requires, before a court approves a contested termination or substantial reduction, a finding that the balance of equities clearly favors such approval.  Allows courts to use extrinsic evidence in determining a plan's intent.
To amend the Employee Retirement Income Security Act of 1974 with respect to rules governing litigation contesting termination or substantial reduction of retiree health benefits, to require a preponderance of evidence for termination or substantial reduction of retiree health benefits, and to allow courts to use extrinsic evidence in determining the intent of a plan.