To suspend the beginning date for required distributions from defined contribution plans based on attainment of age 70 1/2, to waive the 10 percent penalty on withdrawals from qualified retirement plans during 2008 and 2009 for financial hardship, and for other purposes.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Retirement Fairness and Emergency 
Relief Act of 2008''.

SEC. 2. SUSPENSION OF REQUIRED BEGINNING DATE FOR DISTRIBUTIONS FROM 
              DEFINED CONTRIBUTION PLANS.

    (a) In General.--In the case of a defined contribution plan--
            (1) section 401(a)(9) of the Internal Revenue Code of 1986 
        shall not apply during the suspension period,
            (2) in lieu of the calendar year specified in subparagraph 
        (C)(i) of section 401(a)(9) of such Code, the calendar year 
        specified in such subparagraph shall be the later of--
                    (A) the calendar year described in such 
                subparagraph (C)(i), or
                    (B) calendar year 2010, and
            (3) the suspension period shall not be taken into account 
        for purposes of applying any time limitation in such section 
        401(a)(9).
    (b) Suspension Period.--For purposes of this section, the term 
``suspension period'' means the period beginning on January 1, 2008, 
and ending on December 31, 2009.
    (c) Application to Certain Other Plans.--The following sections 
shall be applied for the suspension period under rules similar to the 
rules of subsection (a) of this section--
            (1) in the case of a defined contribution plan, subsections 
        (a) and (b) of section 403, and sections 408 and 408A, of such 
        Code, and
            (2) in the case of an eligible deferred compensation plan 
        described in section 457(b) of such Code which is maintained by 
        an eligible employer described in section 457(e)(1)(A) of such 
        Code, section 457 of such Code.
    (d) Application to Certain Periodic Payments.--For purposes of this 
section, in the case of a defined contribution plan, the failure to 
make a payment from a qualified retirement plan during the suspension 
period in an amount less than would be required under the applicable 
method shall not be treated as a modification for purposes of section 
72(t)(2)(A)(iv) of such Code.
    (e) Provisions Relating to Plan Amendments.--
            (1) In general.--If this section applies to any plan or 
        annuity contract, such plan or contract shall be treated as 
        being operated in accordance with the terms of the plan during 
        the period described in paragraph (2)(B)(i).
            (2) Amendments to which section applies.--
                    (A) In general.--This section shall apply to any 
                amendment to any plan or annuity contract which is 
                made--
                            (i) pursuant to this section or pursuant to 
                        any regulation issued by the Secretary of the 
                        Treasury to carry out this section, and
                            (ii) on or before the last day of the first 
                        plan year beginning on or after January 1, 
                        2009.
                    (B) Conditions.--This section shall not apply to 
                any amendment unless--
                            (i) during the period--
                                    (I) beginning on the first day of 
                                the suspension period, and
                                    (II) ending on the date described 
                                in subparagraph (A)(ii) (or, if 
                                earlier, the date the plan or contract 
                                amendment is adopted), the plan or 
                                contract is operated as if such plan or 
                                contract amendment were in effect, and
                            (ii) such plan or contract amendment 
                        applies retroactively for such period.
    (f) Effective Date.--
            (1) In general.--This section shall take effect on the date 
        of the enactment of this Act.
            (2) Recontribution of distributions before date of 
        enactment.--
                    (A) In general.--Any individual who receives a 
                payment or distribution during the period beginning on 
                January 1, 2008, and ending on the date of the 
                enactment of this Act from a plan to which subsection 
                (a) or (c) of this section applies may, before the end 
                of the suspension period, make one or more 
                contributions in an aggregate amount not to exceed the 
                amount of such payments or distributions to an eligible 
                retirement plan of which such individual is a 
                beneficiary and to which a rollover contribution of 
                such distribution could be made under section 402(c), 
                403(a)(4), 403(b)(8), 408(d)(3), or 457(e)(16) of such 
                Code, as the case may be.
                    (B) Treatment of repayments of distributions from 
                eligible retirement plans other than iras.--For 
                purposes of the Internal Revenue Code of 1986, if a 
                contribution is made pursuant to subparagraph (A) to an 
                eligible retirement plan other than an individual 
                retirement plan, then the taxpayer shall, to the extent 
                of the amount of the contribution, be treated as having 
                received such payments or distributions in an eligible 
                rollover distribution (as defined in section 402(c)(4) 
                of such Code) and as having transferred the amount to 
                the eligible retirement plan in a direct trustee to 
                trustee transfer within 60 days of the distribution.
                    (C) Treatment of repayments for distributions from 
                iras.--For purposes of the Internal Revenue Code of 
                1986, if a contribution is made pursuant to 
                subparagraph (A) to an individual retirement plan (as 
                defined by section 7701(a)(37) of such Code), then, to 
                the extent of the amount of the contribution, such 
                payments or distributions shall be treated as a 
                distribution described in section 408(d)(3) of such 
                Code and as having been transferred to the individual 
                retirement plan in a direct trustee to trustee transfer 
                within 60 days of the distribution.

SEC. 3. WAIVER OF 10 PERCENT PENALTY ON WITHDRAWALS FROM QUALIFIED 
              RETIREMENT PLANS DURING 2008 AND 2009 FOR FINANCIAL 
              HARDSHIP.

    (a) In General.--Paragraph (1) of section 72(t) of the Internal 
Revenue Code of 1986 (relating to imposition of additional tax) shall 
not apply to qualified financial hardship distributions from a 
qualified retirement plan (as defined in section 4974(c) of such Code), 
to an individual. Distributions shall not be taken into account under 
the preceding sentence if such distributions are described in 
subparagraph (A), (C), (D), (E), (F), or (G) of section 72(t)(2) of 
such Code or to the extent section 72(t)(1) of such Code does not apply 
to such distributions by reason of section 72(t)(2)(B).
    (b) Qualified Foreclosure Distributions.--For purposes of 
subsection (a)--
            (1) In general.--The term ``qualified financial hardship 
        distribution'' means any payment or distribution received after 
        December 31, 2007, and before January 1, 2010, by an individual 
        on account of financial hardship (as determined by the 
        Secretary of the Treasury).
            (2) Limitation.--The amount of payments or distributions 
        received by an individual which may be treated as qualified 
        financial hardship distributions for any taxable year shall not 
        exceed $15,000.
            (3) Amount distributed may be repaid.--
                    (A) In general.--Any individual who receives a 
                qualified financial hardship distribution may, at any 
                time during the 5-year period beginning on the day 
                after the date on which such distribution was received, 
                make one or more contributions in an aggregate amount 
                not to exceed the amount of such distribution to an 
                eligible retirement plan of which such individual is a 
                beneficiary and to which a rollover contribution of 
                such distribution could be made under section 402(c), 
                403(a)(4), 403(b)(8), 408(d)(3), or 457(e)(16), as the 
                case may be, of the Internal Revenue Code of 1986.
                    (B) Treatment of repayments of distributions from 
                eligible retirement plans other than iras.--For 
                purposes of the Internal Revenue Code of 1986, if a 
                contribution is made pursuant to subparagraph (A) with 
                respect to a qualified financial hardship distribution 
                from an eligible retirement plan other than an 
                individual retirement plan, then the taxpayer shall, to 
                the extent of the amount of the contribution, be 
                treated as having received the qualified financial 
                hardship distribution in an eligible rollover 
                distribution (as defined in section 402(c)(4) of such 
                Code) and as having transferred the amount to the 
                eligible retirement plan in a direct trustee to trustee 
                transfer within 60 days of the distribution.
                    (C) Treatment of repayments for distributions from 
                iras.--For purposes of the Internal Revenue Code of 
                1986, if a contribution is made pursuant to 
                subparagraph (A) with respect to a qualified financial 
                hardship distribution from an individual retirement 
                plan (as defined by section 7701(a)(37) of such Code), 
                then, to the extent of the amount of the contribution, 
                the qualified financial hardship distribution shall be 
                treated as a distribution described in section 
                408(d)(3) of such Code and as having been transferred 
                to the eligible retirement plan in a direct trustee to 
                trustee transfer within 60 days of the distribution.
            (4) Special rules.--
                    (A) Exemption of distributions from trustee to 
                trustee transfer and withholding rules.--For purposes 
                of sections 401(a)(31), 402(f), and 3405 of the 
                Internal Revenue Code of 1986, qualified financial 
                hardship distributions shall not be treated as eligible 
                rollover distributions.
                    (B) Qualified financial hardship distributions 
                treated as meeting plan distribution requirements.--For 
                purposes this title, a qualified financial hardship 
                distribution shall be treated as meeting the 
                requirements of sections 401(k)(2)(B)(i), 
                403(b)(7)(A)(ii), 403(b)(11), and 457(d)(1)(A) of such 
                Code.
    (c) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act.

Summary: Retirement Fairness and Emergency Relief Act of 2008 - Suspends for calendar 2008 and 2009 the beginning date for required distributions from certain individual retirement (IRA) plans. Waives the 10 additional tax (penalty) under the Internal Revenue Code for early distributions from qualified retirement plans in the case of a qualified financial hardship distribution to an individual during calendar 2008-2009 of up to $15,000 per taxable year, as determined by the Secretary of the Treasury .