SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Pension Benefits Fairness Act''.

SEC. 2. MODIFICATIONS OF JOINT AND SURVIVOR ANNUITY REQUIREMENTS.

    (a) Amendments to ERISA.--
            (1) Amount of annuity.--
                    (A) In general.--Paragraph (1) of section 205(a) of 
                the Employee Retirement Income Security Act of 1974 (29 
                U.S.C. 1055(a)) is amended by inserting ``or, at the 
                election of the participant, shall be provided in the 
                form of a qualified joint and \2/3\ survivor annuity'' 
                after ``survivor annuity,''.
                    (B) Definition.--Subsection (d) of section 205 of 
                such Act (29 U.S.C. 1055) is amended--
                            (i) by redesignating paragraphs (1) and (2) 
                        as subparagraphs (A) and (B), respectively,
                            (ii) by inserting ``(1)'' after ``(d)'', 
                        and
                            (iii) by adding at the end the following 
                        new paragraph:
    ``(2) For purposes of this section, the term ``qualified joint and 
\2/3\ survivor annuity'' means an annuity--
            ``(A) for the participant while both the participant and 
        the spouse are alive with a survivor annuity for the life of 
        surviving individual (either the participant or the spouse) 
        equal to 67 percent of the amount of the annuity which is 
        payable to the participant while both the participant and the 
        spouse are alive,
            ``(B) which is the actuarial equivalent of a single annuity 
        for the life of the participant, and
            ``(C) which, for all other purposes of this Act, is treated 
        as a qualified joint and survivor annuity.''.
            (2) Illustration requirement.--Clause (i) of section 
        205(c)(3)(A) of such Act (29 U.S.C. 1055(c)(3)(A)) is amended 
        to read as follows:
            ``(i) the terms and conditions of each qualified joint and 
        survivor annuity and qualified joint and \2/3\ survivor annuity 
        offered, accompanied by an illustration of the benefits under 
        each such annuity for the particular participant and spouse and 
        an acknowledgement form to be signed by the participant and the 
        spouse that they have read and considered the illustration 
        before any form of retirement benefit is chosen,''.
    (b) Amendments to Internal Revenue Code.--
            (1) Amount of annuity.--
                    (A) In general.--Clause (i) of section 
                401(a)(11)(A) of the Internal Revenue Code of 1986 
                (relating to requirement of joint and survivor annuity 
                and preretirement survivor annuity) is amended by 
                inserting ``or, at the election of the participant, 
                shall be provided in the form of a qualified joint and 
                \2/3\ survivor annuity'' after ``survivor annuity,''.
                    (B) Definition.--Section 417 of such Code (relating 
                to definitions and special rules for purposes of 
                minimum survivor annuity requirements) is amended by 
                redesignating subsection (f) as subsection (g) and by 
                inserting after subsection (e) the following new 
                subsection:
    ``(f) Definition of Qualified Joint and \2/3\ Survivor Annuity.--
For purposes of this section and section 401(a)(11), the term 
``qualified joint and \2/3\ survivor annuity'' means an annuity--
            ``(1) for the participant while both the participant and 
        the spouse are alive with a survivor annuity for the life of 
        surviving individual (either the participant or the spouse) 
        equal to 67 percent of the amount of the annuity which is 
        payable to the participant while both the participant and the 
        spouse are alive,
            ``(2) which is the actuarial equivalent of a single annuity 
        for the life of the participant, and
            ``(3) which, for all other purposes of this title, is 
        treated as a qualified joint and survivor annuity.''.
            (2) Illustration requirement.--Clause (i) of section 
        417(a)(3)(A) of such Code (relating to explanation of joint and 
        survivor annuity) is amended to read as follows:
                            ``(i) the terms and conditions of each 
                        qualified joint and survivor annuity and 
                        qualified joint and \2/3\ survivor annuity 
                        offered, accompanied by an illustration of the 
                        benefits under each such annuity for the 
                        particular participant and spouse and an 
                        acknowledgement form to be signed by the 
                        participant and the spouse that they have read 
                        and considered the illustration before any form 
                        of retirement benefit is chosen,''.
    (c) Effective Dates.--
            (1) In general.--The amendments made by this section shall 
        apply to plan years beginning after December 31, 1996.
            (2) Special rule for collectively bargained plans.--In the 
        case of a plan maintained pursuant to 1 or more collective 
        bargaining agreements between employee representatives and 1 or 
        more employers ratified on or before the date of enactment of 
        this Act, the amendments made by this section shall apply to 
        the first plan year beginning on or after the earlier of--
                    (A) the later of--
                            (i) January 1, 1998, or
                            (ii) the date on which the last of such 
                        collective bargaining agreements terminates 
                        (determined without regard to any extension 
                        thereof after the date of enactment of this 
                        Act), or
                    (B) January 1, 1999.
            (3) Plan amendments.--If any amendment made by this section 
        requires an amendment to any plan, such plan amendment shall 
        not be required to be made before the first plan year beginning 
        on or after January 1, 1999, if--
                    (A) during the period after such amendment made by 
                this section takes effect and before such first plan 
                year, the plan is operated in accordance with the 
                requirements of such amendment made by this section, 
                and
                    (B) such plan amendment applies retroactively to 
                the period after such amendment made by this section 
                takes effect and such first plan year.
        A plan shall not be treated as failing to provide definitely 
        determinable benefits or contributions, or to be operated in 
        accordance with the provisions of the plan, merely because it 
        operates in accordance with this paragraph.
Pension Benefits Fairness Act - Amends the Employee Retirement Income Security Act of 1974 and the Internal Revenue Code to require the offer in every defined employee benefit plan of a joint and two-thirds survivor annuity option. 
Requires comparative disclosure of all benefit options to both spouses.
Pension Benefits Fairness Act