Women's Investment and Savings Equity Act of 1997

Summary: Women's Investment and Savings Equity Act of 1997 - Amends the Internal Revenue Code with respect to limitations on the deduction for active participants in certain pension plans to provide that an individual's participation in a plan is not treated as participation by the individual's spouse. 
Permits retirement contributions to be made for periods during which individuals were on leave for maternity or paternity leave. 
Permits "catchup contributions" by parents returning to work after periods of nonparticipation in a plan.  Defines "catchup contributions."

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Women's Investment and Savings 
Equity Act of 1997''.

SEC. 2. INDIVIDUAL'S ELIGIBILITY FOR DEDUCTIBLE IRA NOT DETERMINED BY 
              REFERENCE TO SPOUSE'S PARTICIPATION IN PENSION PLAN.

    (a) In General.--Section 219(g)(1) of the Internal Revenue Code of 
1986 (relating to limitation on deduction for active participants in 
certain pension plans) is amended by striking ``or the individual's 
spouse''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 1996.

SEC. 3. INDIVIDUALS MAY MAKE CONTRIBUTIONS FOR PERIODS OF MATERNITY OR 
              PATERNITY LEAVE.

    (a) In General.--Section 414 of the Internal Revenue Code of 1986 
(relating to definitions and special rules) is amended by adding at the 
end the following:
    ``(v) Right To Make Contributions With Respect to Periods of 
Maternity and Paternity Leave.--
            ``(1) In general.--For purposes of this title--
                    ``(A) a trust which forms part of a plan shall not 
                constitute a qualified trust under section 401(a),
                    ``(B) a plan shall not be treated as described in 
                section 403(b),
                    ``(C) a plan shall not be treated as an eligible 
                deferred compensation plan under section 457, and
                    ``(D) an arrangement shall not be treated as 
                meeting the requirements of section 408 (k) or (p),
        unless such plan or arrangement permits participants who were 
        on eligible maternity or paternity leave to make additional 
        elective deferrals under the plan or arrangement with respect 
        to periods of such leave.
            ``(2) Treatment of contributions.--
                    ``(A) In general.--In the case of any contribution 
                to a plan under paragraph (1) (and any employer 
                matching contribution with respect thereto)--
                            ``(i) such contribution shall not, with 
                        respect to the year in which the contribution 
                        is made--
                                    ``(I) be subject to any otherwise 
                                applicable limitation contained in 
                                section 402(g), 402(h), 403(b), 404(a), 
                                404(h), 408, 415, or 457, or
                                    ``(II) be taken into account in 
                                applying such limitations to other 
                                contributions or benefits under such 
                                plan or any other such plan,
                            ``(ii) such contribution shall be subject 
                        to the limitations referred to in clause (i) 
                        with respect to the year to which the 
                        contribution relates (in accordance with rules 
                        prescribed by the Secretary), and
                            ``(iii) except as provided in subparagraph 
                        (B)(i), such plan shall not be treated as 
                        failing to meet the requirements of section 
                        401(a)(4), 401(a)(26), 401(k)(3), 401(k)(11), 
                        401(k)(12), 401(m), 403(b)(12), 408(k), 408(p), 
                        410(b), or 416 by reason of the making of (or 
                        the right to make) such contribution.
                    ``(B) Matching contributions.--Nothing in 
                subparagraph (A) shall require an employer to make any 
                matching contribution with respect to any additional 
                elective deferrals under paragraph (1), but if the 
                employer elects to make any such matching 
                contribution--
                            ``(i) the requirements of section 401(a)(4) 
                        shall be applied separately to all such 
                        matching contributions made during a year, and
                            ``(ii) the amount of any such matching 
                        contribution may not exceed the maximum amount 
                        which could have been made under the plan had 
                        the elective deferral actually been made during 
                        the period of eligible maternity and paternity 
                        leave.
            ``(3) Amount and timing of elective deferrals.--A plan 
        shall not be treated as meeting the requirements of paragraph 
        (1) unless the plan provides the following:
                    ``(A) Amount.--The amount of any elective deferral 
                under paragraph (1) which any employee is permitted to 
                make with respect to any period of eligible maternity 
                and paternity leave shall not exceed the maximum amount 
                of the elective deferrals that the employee would have 
                been permitted to make during such period in accordance 
                with the limitation referred to in paragraph (2)(A)(i) 
                if the individual--
                            ``(i) had not been on eligible maternity 
                        and paternity leave during such period, and
                            ``(ii) had received compensation in an 
                        amount determined under rules similar to the 
                        rules under subsection (u)(7).
                Proper adjustment shall be made to the amount 
                determined under the preceding sentence for any 
                elective deferrals actually made during such period.
                    ``(B) Timing.--An employee may make an elective 
                deferral to which paragraph (1) applies at any time 
                during the 3-year period beginning on the date on which 
                the eligible maternity or paternity leave ends. Any 
                matching contribution with respect to any such elective 
                deferral shall be made not later than the due date 
                (including extensions) for the filing of the employer's 
                return for the taxable year in which such elective 
                deferral is made.
            ``(4) Eligible maternity and paternity leave.--For purposes 
        of this subsection--
                    ``(A) In general.--The term `eligible maternity or 
                paternity leave' means any absence of an individual 
                from work for any period--
                            ``(i) by reason of the pregnancy of the 
                        individual,
                            ``(ii) by reason of the birth of a child of 
                        the individual,
                            ``(iii) by reason of the placement of a 
                        child with the individual in connection with 
                        the adoption of the child by the individual, or
                            ``(iv) for purposes of caring for such 
                        child for a period beginning immediately 
                        following such birth or placement.
                    ``(B) Limitation.--Such period may not exceed 12 
                months with respect to any child.
            ``(5) Other definitions and rules.--For purposes of this 
        subsection--
                    ``(A) Elective deferral.--The term `elective 
                deferral' has the meaning given such term by subsection 
                (u)(2)(C). Such term shall also include any after-tax 
                employee contributions described in subsection 
                (u)(2)(D).
                    ``(B) Plan.--The term `plan' includes any 
                arrangement under section 408 (k) or (p).
                    ``(C) Certain retroactive adjustments not 
                required.--For purposes of this subchapter and 
                subchapter E, the rules of subsection (u)(3) shall 
                apply.
                    ``(D) Loan repayment suspensions permitted.--In the 
                case of any plan or arrangement to which paragraph (1) 
                applies, the rules of subsection (u)(4) shall apply to 
                any loan repayment suspension during any period of 
                eligible maternity and paternity leave.''
    (b) Effective Date.--The amendment made by this section shall apply 
to periods of eligible maternity and paternity leave beginning after 
December 31, 1997.

SEC. 4. CATCHUP CONTRIBUTIONS FOR FAMILIES WITH CHILDREN NOT COVERED BY 
              A PENSION PLAN.

    (a) In General.--Section 414 of the Internal Revenue Code of 1986 
(relating to definitions and special rules), as amended by section 3, 
is amended by adding at the end the following:
    ``(w) Catchup Contributions for Families With Children Not Covered 
by a Pension Plan.--
            ``(1) In general.--For purposes of this title--
                    ``(A) a trust which forms part of a plan shall not 
                constitute a qualified trust under section 401(a),
                    ``(B) a plan shall not be treated as described in 
                section 403(b),
                    ``(C) a plan shall not be treated as an eligible 
                deferred compensation plan under section 457, and
                    ``(D) an arrangement shall not be treated as 
                meeting requirements of section 408 (k) or (p),
        unless such plan or arrangement permits eligible participants 
        to make additional elective deferrals under the plan or 
        arrangement in accordance with paragraph (2).
            ``(2) Catchup contributions.--
                    ``(A) In general.--A plan shall permit an eligible 
                participant to make the additional elective deferrals 
                under paragraph (1) in any year which is certified as a 
                catchup year by the participant under subparagraph (E).
                    ``(B) Limitation on amount of additional 
                deferrals.--A plan shall not permit additional elective 
                deferrals under paragraph (1) for any year in an amount 
                greater than the lesser of--
                            ``(i) the amount of the elective deferrals 
                        the participant may otherwise make under the 
                        plan for such year (determined without regard 
                        to this subsection, subsection (u), or any 
                        limitation described in subparagraph (C)(i)), 
                        or
                            ``(ii) the excess (if any) of--
                                    ``(I) 120 percent of the dollar 
                                limitation in effect under section 
                                402(g), 408(p), or 457(b)(2)(A), 
                                whichever is applicable, for taxable 
                                years beginning in the calendar year in 
                                which the plan year begins, over
                                    ``(II) any other elective deferrals 
                                of the participant for such year which 
                                are made without regard to this 
                                subsection.
                    ``(C) Treatment of contributions.--In the case of 
                any contribution to a plan under paragraph (1) (and any 
                employer matching contribution with respect thereto)--
                            ``(i) such contribution shall not, with 
                        respect to the year in which the contribution 
                        is made--
                                    ``(I) be subject to any otherwise 
                                applicable limitation contained in 
                                section 402(g), 402(h), 403(b), 404(a), 
                                404(h), 408, 415, or 457, or
                                    ``(II) be taken into account in 
                                applying such limitations to other 
                                contributions or benefits under such 
                                plan or any other such plan, and
                            ``(ii) except as provided in subparagraph 
                        (D)(i), such plan shall not be treated as 
                        failing to meet the requirements of section 
                        401(a)(4), 401(a)(26), 401(k)(3), 401(k)(11), 
                        401(k)(12), 401(m), 403(b)(12), 408(k), 408(p), 
                        410(b), or 416 by reason of the making of (or 
                        the right to make) such contribution.
                    ``(D) Matching contributions.--Nothing in 
                subparagraph (A) shall require an employer to make any 
                matching contribution with respect to any additional 
                elective deferrals under paragraph (1) for any year, 
                but if the employer elects to make any such matching 
                contribution--
                            ``(i) the requirements of section 401(a)(4) 
                        shall be applied separately to all such 
                        matching contributions made during a year, and
                            ``(ii) the amount of any such matching 
                        contribution may not exceed the maximum amount 
                        which could have been made under the terms of 
                        the plan in effect for elective deferrals made 
                        for such year without regard to this 
                        subsection.
                    ``(E) Certification of catchup years.--
                            ``(i) In general.--A participant making 
                        additional elective deferrals under paragraph 
                        (1) for any year shall certify to the plan 
                        administrator that--
                                    ``(I) the participant is an 
                                eligible participant, and
                                    ``(II) the year is a catchup year.
                            ``(ii) Catchup year.--An eligible 
                        participant may certify 1 or more years as 
                        catchup years, except that the total number of 
                        years which may be certified shall not exceed 
                        the excess (if any) of--
                                    ``(I) the number of years (not in 
                                excess of 18) described in paragraph 
                                (3) occurring before the year in 
                                question, over
                                    ``(II) the number of years 
                                previously certified by the participant 
                                under this subsection.
                            ``(iii) Plans not responsible for 
                        certification failures.--A plan shall not be 
                        treated as failing to meet the requirements of 
                        this subsection by reason of reliance on an 
                        incorrect certification under this subparagraph 
                        unless the plan administrator knew, or 
                        reasonably should have known, that the 
                        certification was incorrect.
            ``(3) Eligible participant.--For purposes of this 
        subsection, the term `eligible participant' means, with respect 
        to any year, a participant in a plan who, for any calendar year 
        before the calendar year in which the year begins--
                    ``(A) was not an active participant (within the 
                meaning of section 219(g)(5)) for any plan year 
                beginning in the calendar year, and
                    ``(B) had a child or stepchild who had not attained 
                age 18 with respect to whom a deduction was allowed 
                under section 151 to the participant (or the 
                participant's spouse) for a taxable year beginning in 
                the calendar year.
            ``(4) Other definitions and rules.--For purposes of this 
        subsection--
                    ``(A) Elective deferral.--The term `elective 
                deferral' has the meaning given such term by subsection 
                (u)(2)(C). Such term shall also include after-tax 
                employee contributions described in subsection 
                (u)(2)(D).
                    ``(B) Plan.--The term `plan' includes any 
                arrangement under section 408 (k) or (p).
                    ``(C) Certain retroactive adjustments not 
                required.--For purposes of this subchapter and 
                subchapter E, the rules of subsection (u)(3) shall 
                apply.''
    (b) Effective Date.--The amendment made by this section shall apply 
to contributions in taxable years beginning after December 31, 1997.