I 

112TH CONGRESS 

1ST SESSION H. R. 3561 

To amend the Internal Revenue Code of 1986 and the Employee Retirement 

Income Security Act of 1974 to reduce administrative burdens and encourage retirement plan formation and retention. 

IN THE HOUSE OF REPRESENTATIVES 

DECEMBER 5, 2011 

Mr. KIND (for himself, Mr. GERLACH, and Mr. NEAL) introduced the following bill; which was referred to the Committee on Ways and Means, 

and in addition to the Committee on Education and the Workforce, for 

a period to be subsequently determined by the Speaker, in each case for 

consideration of such provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To amend the Internal Revenue Code of 1986 and the Employee Retirement Income Security Act of 1974 to reduce 

administrative burdens and encourage retirement plan 

formation and retention. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Small Business Pen5 sion Promotion Act of 2011’’. 


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1 SEC. 2. ALTERNATIVE VALUATION DATE FOR REQUIRED 

2 MINIMUM DISTRIBUTIONS. 

3 If the Secretary of the Treasury determines there has 

4 been a significant and broadly applicable decrease in the 

5 value of investment assets held by defined contribution 

6 plans and individual retirement accounts for any calendar 

7 year, the Secretary may— 

8 (1) allow taxpayers to use a later valuation date 

9 than would otherwise be required under Treasury 

10 Regulations to determine the required minimum dis11 tribution for such year from individual accounts 

12 under section 401(a)(9), 403(b)(10), 408(a)(6), 

13 408(b)(3), or 457(d)(2) of the Internal Revenue 

14 Code of 1986, 

15 (2) allow additional time for making any such 

16 distributions, and 

17 (3) provide such other relief as may be appro18 priate in light of such a decrease in investment asset 

19 values. 

20 SEC. 3. DEDUCTION FOR PENSION AND IRA CONTRIBU21 TIONS ALLOWED IN COMPUTING NET EARN22 INGS FROM SELF-EMPLOYMENT. 

23 (a) IN GENERAL.—Subsection (a) of section 1402 of 

24 the Internal Revenue Code of 1986 is amended by striking 

25 ‘‘and’’ at the end of paragraph (16), by striking the period 

26 at the end of paragraph (17) and inserting ‘‘, and’’, and 


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1 by inserting after paragraph (17) the following new para2 graph: 

3 ‘‘(18) any deduction allowed under section 404 

4 by reason of section 404(a)(8)(C) (other than any 

5 deduction allowed for elective deferrals (as defined in 

6 section 402(g)(3)) shall be allowed, except that the 

7 amount of such deduction shall be determined with8 out regard to this paragraph.’’. 

9 (b) CONFORMING AMENDMENT.—Clause (v) of sec10 tion 401(c)(2)(A) of such Code is amended by inserting 

11 ‘‘for elective deferrals (as defined in section 402(g)(3))’’ 

12 after ‘‘to the taxpayer’’. 

13 (c) EFFECTIVE DATE.—The amendments made by 

14 this section shall apply to taxable years beginning after 

15 December 31, 2011. 

16 SEC. 4. ADJUSTED FUNDING TARGET ATTAINMENT PER17 CENTAGE DETERMINED WITHOUT REGARD 

18 TO REDUCTION FOR CREDIT BALANCES FOR 

19 FUNDING-BASED LIMITS UNDER SINGLE EM20 PLOYER PLANS. 

21 (a) AMENDMENT OF 1986 CODE.—Paragraph (2) of 

22 section 436(j) of the Internal Revenue Code of 1986 is 

23 amended— 

24 (1) by striking the period at the end and insert25 ing ‘‘, and’’, 


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1 (2) by striking ‘‘under paragraph (1) by in2 creasing’’ and inserting the following: ‘‘under para3 graph (1)— 

4 ‘‘(A) by increasing’’, and 

5 (3) by adding at the end the following new sub6 paragraph: 

7 ‘‘(B) without regard to the reduction under 

8 section 430(f)(4)(B).’’. 

9 (b) AMENDMENT OF ERISA.—Section 206(g)(9)(B) 

10 of the Employee Retirement Income Security Act of 1974 

11 (29 U.S.C. 1056(g)(9)(B)) is amended— 

12 (1) by striking the period at the end and insert13 ing ‘‘, and’’, 

14 (2) by striking ‘‘under subparagraph (A) by in15 creasing’’ and inserting the following: ‘‘under sub16 paragraph (A)— 

17 ‘‘(i) by increasing’’, and 

18 (3) by adding at the end the following new 

19 clause: 

20 ‘‘(ii) without regard to the reduction 

21 under section 303(f)(4)(B).’’. 

22 (c) EFFECTIVE DATE.—The amendments made by 

23 this section shall apply to plan years beginning after De24 cember 31, 2011. 


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1 SEC. 5. REPEAL OF TAX ON NONDEDUCTIBLE CONTRIBU2 TIONS TO QUALIFIED EMPLOYER PLANS. 

3 Effective for taxable years beginning after December 

4 31, 2011, section 4972 is repealed. 

5 SEC. 6. INTERIM AMENDMENTS TO QUALIFIED PLANS. 

6 The Secretary of the Treasury shall, not later than 

7 2 years after the date of the enactment of this Act, revise 

8 the administrative rules governing interim amendments of 

9 qualified plans to provide greater flexibility and reduce 

10 plan sponsor burden, while taking into account the need 

11 for plan terms to reflect the benefits to which participants 

12 are entitled. 

13 SEC. 7. GRANDFATHERING OF PLANS WITH NORMAL RE14 TIREMENT AGE BASED ON EARLIER OF AT15 TAINMENT OF SPECIFIC AGE OR COMPLE16 TION OF 30 OR MORE YEARS OF BENEFIT AC17 CRUAL SERVICE. 

18 (a) AMENDMENT OF 1986 CODE.— 

19 (1) IN GENERAL.—Section 411 of the Internal 

20 Revenue Code of 1986 is amended by adding at the 

21 end the following new subsection: 

22 ‘‘(f) SPECIAL RULE FOR DETERMINING NORMAL RE23 TIREMENT AGE FOR CERTAIN EXISTING DEFINED BEN24 EFIT PLANS.— 

25 ‘‘(1) IN GENERAL.—An applicable trust shall 

26 not fail to be treated as a qualified trust under secVerDate Mar 15 2010 02:01 Dec 06, 2011 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H3561.IH H3561

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1 tion 401(a) of the Internal Revenue Code of 1986, 

2 and shall not be treated as failing to have a uniform 

3 normal retirement age for purposes of this sub4 chapter, solely because the plan of which it is a part 

5 has a normal retirement age described in paragraph 

6 (2)(A). 

7 ‘‘(2) APPLICABLE TRUST.—For purposes of this 

8 subsection— 

9 ‘‘(A) IN GENERAL.—The term ‘applicable 

10 trust’ means a trust forming a part of a plan 

11 that on December 5, 2011, has a normal retire12 ment age which is the earlier of— 

13 ‘‘(i) the attainment of an age which is 

14 not earlier than age 60 but not later than 

15 65, or 

16 ‘‘(ii) the completion of 30 or more 

17 years of benefit accrual service. 

18 ‘‘(B) LIMITED APPLICATION OF SPECIFIED

19 NORMAL RETIREMENT AGE PERMITTED.—A 

20 trust shall not fail to be treated as an applica21 ble trust solely because, as of such date, a nor22 mal retirement age described in subparagraph 

23 (A) only applies to certain participants or cer24 tain employers participating in the plan of 

25 which such trust is a part. 


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1 ‘‘(C) EXPANDED APPLICATION PER2 MITTED.—If, after such date, the plan of which 

3 an applicable trust is a part expands the appli4 cation of a normal retirement age described in 

5 subparagraph (A) to additional participants or 

6 employers, such trust shall be treated as an ap7 plicable trust with respect to any such partici8 pants and employers.’’. 

9 (2) SERVICE-BASED RETIREMENTS IN GOVERN10 MENTAL PLANS.— 

11 (A) IN GENERAL.—Subsection (e) of sec12 tion 411 of such Code is amended by adding at 

13 the end the following new paragraph: 

14 ‘‘(3) A plan described in paragraph (1)(A) shall 

15 not be treated as failing to meet any requirement of 

16 this subchapter or any regulation issued under this 

17 subchapter, or as failing to have a permissible nor18 mal retirement age for the purposes of this sub19 chapter or any regulation issued under this sub20 chapter, solely because— 

21 ‘‘(A) the plan expresses its normal retire22 ment age (whether stated in, or implied 

23 through, the terms of the plan) based on years 

24 of service or a combination of years of service 


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1 and the chronological age of the plan partici2 pant, or 

3 ‘‘(B) the plan expresses a normal retire4 ment benefit as a benefit payable without actu5 arial reduction for age upon attainment of an 

6 age, years of service, or a combination of age 

7 and years of service.’’. 

8 (B) RULES.—Not later than 180 after the 

9 date of the enactment of this Act, the Secretary 

10 of the Treasury shall modify the rules for deter11 mining normal retirement age under sections 

12 401(a) and 411 of the Internal Revenue Code 

13 of 1986, including Treasury Regulation 

14 § 1.401(a)–1, to be consistent with the amend15 ment made by this paragraph. 

16 (b) AMENDMENTS OF ERISA.—Section 204 of the 

17 Employee Retirement Income Security Act of 1974 (29 

18 U.S.C. 1054) is amended by redesignating subsection (k) 

19 as subsection (l) and by inserting after subsection (j) the 

20 following new subsection: 

21 ‘‘(k) SPECIAL RULE FOR DETERMINING NORMAL

22 RETIREMENT AGE FOR CERTAIN EXISTING DEFINED

23 BENEFIT PLANS.— 

24 ‘‘(1) IN GENERAL.—An applicable trust shall 

25 not fail to meet any of the requirements of this title, 


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1 and shall not be treated as failing to have a uniform 

2 normal retirement age for purposes of this title, sole3 ly because the plan of which it is a part has a nor4 mal retirement age described in paragraph (2)(A). 

5 ‘‘(2) APPLICABLE TRUST.—For purposes of this 

6 subsection— 

7 ‘‘(A) IN GENERAL.—The term ‘applicable 

8 trust’ means a trust forming a part of a plan 

9 that on December 5, 2011, has a normal retire10 ment age which is the earlier of— 

11 ‘‘(i) the attainment of an age which is 

12 not earlier than age 60 but not later than 

13 65, or 

14 ‘‘(ii) the completion of 30 or more 

15 years of benefit accrual service. 

16 ‘‘(B) LIMITED APPLICATION OF SPECIFIED

17 NORMAL RETIREMENT AGE PERMITTED.—A 

18 trust shall not fail to be treated as an applica19 ble trust solely because, as of such date, the 

20 normal retirement age described in subpara21 graph (A) only applies to certain participants or 

22 certain employers participating in the plan of 

23 which such trust is a part. 

24 ‘‘(C) EXPANDED APPLICATION PER25 MITTED.—If, after such date, the plan of which 


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1 an applicable trust is a part expands the appli2 cation of the normal retirement age described in 

3 subparagraph (A) to additional participants or 

4 employers, such trust shall be treated as an ap5 plicable trust with respect to any such partici6 pants and employers.’’. 

7 (c) EFFECTIVE DATE.—The amendments made by 

8 this section shall apply to years beginning before, on, or 

9 after the date of the enactment of this Act. 

Æ 


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