SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Family Leave Pension Relief Act of 
1998''.

SEC. 2. PERIODS OF FAMILY AND MEDICAL LEAVE TREATED AS HOURS OF SERVICE 
              FOR PENSION PARTICIPATION AND VESTING.

    (a) Amendments of Internal Revenue Code.--
            (1) Participation.--
                    (A) In general.--Paragraph (3) of section 410(a) of 
                the Internal Revenue Code of 1986 (relating to minimum 
                participation standards) is amended by adding at the 
                end the following new subparagraph:
                    ``(E) Family and medical leave treated as 
                service.--
                            ``(i) In general.--For purposes of this 
                        subsection, in the case of an individual who is 
                        absent from work on leave required to be given 
                        to such individual under the Family and Medical 
                        Leave Act of 1993, the plan shall treat as 
                        hours of service--
                                    ``(I) the hours of service which 
                                otherwise would normally have been 
                                credited to such individual but for 
                                such absence, or
                                    ``(II) in any case in which the 
                                plan is unable to determine the hours 
                                described in subclause (I), 8 hours of 
                                service per day of absence.
                            ``(ii) Year to which hours are credited.--
                        The hours described in clause (i) shall be 
                        treated as hours of service as provided in this 
                        subparagraph--
                                    ``(I) only in the year in which the 
                                absence from work begins, if a 
                                participant would have a year of 
                                service solely because the period of 
                                absence is treated as hours of service 
                                as provided in clause (i); or
                                    ``(II) in any other case, in the 
                                immediately following year.''
                    (B) Coordination with treatment of maternity and 
                paternity absences under break in service rules.--
                Subparagraph (E) of section 410(a)(5) of such Code is 
                amended--
                            (i) by inserting ``not under family and 
                        medical leave act of 1993'' after ``absences'' 
                        in the heading, and
                            (ii) by adding at the end of clause (i) the 
                        following new sentence: ``The preceding 
                        sentence shall apply to an absence from work 
                        only if no part of such absence is required to 
                        be given under the Family and Medical Leave Act 
                        of 1993.''
            (2) Vesting.--
                    (A) In general.--Paragraph (5) of section 411(a) of 
                such Code (relating to minimum vesting standards) is 
                amended by adding at the end the following new 
                subparagraph:
                    ``(E) Family and medical leave treated as 
                service.--
                            ``(i) In general.--For purposes of this 
                        subsection, in the case of an individual who is 
                        absent from work on leave required to be given 
                        to such individual under the Family and Medical 
                        Leave Act of 1993, the plan shall treat as 
                        hours of service--
                                    ``(I) the hours of service which 
                                otherwise would normally have been 
                                credited to such individual but for 
                                such absence, or
                                    ``(II) in any case in which the 
                                plan is unable to determine the hours 
                                described in subclause (I), 8 hours of 
                                service per day of absence.
                            ``(ii) Year to which hours are credited.--
                        The hours described in clause (i) shall be 
                        treated as hours of service as provided in this 
                        subparagraph--
                                    ``(I) only in the year in which the 
                                absence from work begins, if a 
                                participant would have a year of 
                                service solely because the period of 
                                absence is treated as hours of service 
                                as provided in clause (i); or
                                    ``(II) in any other case, in the 
                                immediately following year.''
                    (B) Coordination with treatment of maternity and 
                paternity absences under break in service rules.--
                Subparagraph (E) of section 411(a)(6) of such Code is 
                amended--
                            (i) by inserting ``not under family and 
                        medical leave act of 1993'' after ``absences'' 
                        in the heading, and
                            (ii) by adding at the end of clause (i) the 
                        following new sentence: ``The preceding 
                        sentence shall apply to an absence from work 
                        only if no part of such absence is required to 
                        be given under the Family and Medical Leave Act 
                        of 1993.''
    (b) Amendments of ERISA.--
            (1) Participation.--
                    (A) In general.--Paragraph (3) of section 202(a) of 
                the Employee Retirement Income Security Act of 1974 
                (relating to minimum participation standards) is 
                amended by adding at the end the following new 
                subparagraph:
    ``(E)(i) For purposes of this subsection, in the case of an 
individual who is absent from work on leave required to be given to 
such individual under the Family and Medical Leave Act of 1993, the 
plan shall treat as hours of service--
            ``(I) the hours of service which otherwise would normally 
        have been credited to such individual but for such absence, or
            ``(II) in any case in which the plan is unable to determine 
        the hours described in subclause (I), 8 hours of service per 
        day of absence.
    ``(ii) The hours described in clause (i) shall be treated as hours 
of service as provided in this subparagraph--
            ``(I) only in the year in which the absence from work 
        begins, if a participant would have a year of service solely 
        because the period of absence is treated as hours of service as 
        provided in clause (i); or
            ``(II) in any other case, in the immediately following 
        year.''
                    (B) Coordination with treatment of maternity and 
                paternity absences under break in service rules.--
                Subparagraph (A) of section 202(b)(5) of such Act is 
                amended by adding at the end of clause (i) the 
                following new sentence: ``The preceding sentence shall 
                apply to an absence from work only if no part of such 
                absence is required to be given under the Family and 
                Medical Leave Act of 1993.''
            (2) Vesting.--
                    (A) In general.--Paragraph (2) of section 203(b) of 
                such Act (relating to minimum vesting standards) is 
                amended by adding at the end the following new 
                subparagraph:
    ``(E)(i) For purposes of this subsection, in the case of an 
individual who is absent from work on leave required to be given to 
such individual under the Family and Medical Leave Act of 1993, the 
plan shall treat as hours of service--
            ``(I) the hours of service which otherwise would normally 
        have been credited to such individual but for such absence, or
            ``(II) in any case in which the plan is unable to determine 
        the hours described in subclause (I), 8 hours of service per 
        day of absence.
    ``(ii) The hours described in clause (i) shall be treated as hours 
of service as provided in this subparagraph--
            ``(I) only in the year in which the absence from work 
        begins, if a participant would have a year of service solely 
        because the period of absence is treated as hours of service as 
        provided in clause (i); or
            ``(II) in any other case, in the immediately following 
        year.''
                    (B) Coordination with treatment of maternity and 
                paternity absences under break in service rules.--
                Clause (i) of section 203(b)(3)(E) of such Act is 
                amended by adding at the end of clause (i) the 
                following new sentence: ``The preceding sentence shall 
                apply to an absence from work only if no part of such 
                absence is required to be given under the Family and 
                Medical Leave Act of 1993.''
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to plan years beginning on or after January 1, 1999.

SEC. 3. PROVISIONS RELATING TO PLAN AMENDMENTS.

    (a) In General.--If this section applies to any plan amendment--
            (1) such plan shall be treated as being operated in 
        accordance with the terms of the plan during the period 
        described in subsection (b)(2)(A), and
            (2) such plan shall not fail to meet the requirements of 
        section 411(d)(6) of the Internal Revenue Code of 1986 or 
        section 204(g) of the Employee Retirement Income Security Act 
        of 1974 by reason of such amendment.
    (b) Amendments to Which Section Applies.--
            (1) In general.--This section shall apply to any amendment 
        to any plan which is made--
                    (A) pursuant to any amendment made by section 2, 
                and
                    (B) before the first day of the first plan year 
                beginning on or after January 1, 2000.
        In the case of a governmental plan (as defined in section 
        414(d) of the Internal Revenue Code of 1986), this paragraph 
        shall be applied by substituting ``2001'' for ``2000''.
            (2) Conditions.--This section shall not apply to any 
        amendment unless--
                    (A) during the period--
                            (i) beginning on the date the legislative 
                        amendment described in paragraph (1)(A) takes 
                        effect (or in the case of a plan amendment not 
                        required by such legislative amendment, the 
                        effective date specified by the plan), and
                            (ii) ending on the date described in 
                        paragraph (1)(B) (or, if earlier, the date the 
                        plan amendment is adopted),
                the plan is operated as if such plan amendment were in 
                effect, and
                    (B) such plan amendment applies retroactively for 
                such period.
Family Leave Pension Relief Act of 1998 - Amends the Internal Revenue Code and the Employee Retirement Income Security Act of 1974 to count periods of leave permitted by the Family Medical Leave Act of 1993 towards hours of service needed for the fulfillment of pension participation and vesting rules.
Family Leave Pension Relief Act of 1998