I 

112TH CONGRESS 

2D SESSION H. R. 4143 

To amend the Internal Revenue Code of 1986 to extend the period during 

which transfers of excess pension assets may be made to retiree health 

accounts and to provide for the transfer of such assets to retiree group 

term life insurance accounts. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 5, 2012 

Mr. TIBERI (for himself and Mr. PASCRELL) 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 to extend 

the period during which transfers of excess pension assets may be made to retiree health accounts and to 

provide for the transfer of such assets to retiree group 

term life insurance accounts. 

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 ‘‘Extension of Section 

5 420 and Retiree Life Insurance Act of 2012’’. 


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1 SEC. 2. EXTENSION FOR TRANSFERS OF EXCESS PENSION 

2 ASSETS TO RETIREE HEALTH ACCOUNTS. 

3 (a) IN GENERAL.—Paragraph (5) of section 420(b) 

4 of the Internal Revenue Code of 1986 is amended by strik5 ing ‘‘December 31, 2013’’ and inserting ‘‘December 31, 

6 2021’’. 

7 (b) CONFORMING ERISA AMENDMENTS.— 

8 (1) Sections 101(e)(3), 403(c)(1), and 

9 408(b)(13) of the Employee Retirement Income Se10 curity Act of 1974 are each amended by striking 

11 ‘‘Pension Protection Act of 2006’’ and inserting 

12 ‘‘Extension of Section 420 and Retiree Life Insur13 ance Act of 2012’’. 

14 (2) Section 408(b)(13) of such Act (29 U.S.C. 

15 1108(b)(13)) is amended by striking ‘‘January 1, 

16 2014’’ and inserting ‘‘January 1, 2022’’. 

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

18 this Act shall take effect on the date of the enactment 

19 of this Act. 

20 SEC. 3. TRANSFER OF EXCESS PENSION ASSETS TO RE21 TIREE GROUP TERM LIFE INSURANCE AC22 COUNTS. 

23 (a) IN GENERAL.—Subsection (a) of section 420 of 

24 the Internal Revenue Code of 1986 is amended by insert25 ing ‘‘, or an applicable life insurance account,’’ after 

26 ‘‘health benefits account’’. 


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1 (b) APPLICABLE LIFE INSURANCE ACCOUNT DE2 FINED.— 

3 (1) IN GENERAL.—Subsection (e) of section 

4 420 of the Internal Revenue Code of 1986 is amend5 ed by redesignating paragraphs (4) and (5) as para6 graphs (5) and (6), respectively, and by inserting 

7 after paragraph (3) the following new paragraph: 

8 ‘‘(4) APPLICABLE LIFE INSURANCE AC9 COUNT.—The term ‘applicable life insurance ac10 count’ means a separate account established and 

11 maintained for amounts transferred under this sec12 tion for qualified current retiree liabilities based on 

13 premiums for applicable life insurance benefits.’’. 

14 (2) APPLICABLE LIFE INSURANCE BENEFITS

15 DEFINED.—Paragraph (1) of section 420(e) of such 

16 Code is amended by redesignating subparagraph (D) 

17 as subparagraph (E) and by inserting after subpara18 graph (C) the following new subparagraph: 

19 ‘‘(D) APPLICABLE LIFE INSURANCE BENE20 FITS.—The term ‘applicable life insurance bene21 fits’ means group-term life insurance coverage 

22 provided to retired employees who, immediately 

23 before the qualified transfer, are entitled to re24 ceive such coverage by reason of retirement and 

25 who are entitled to pension benefits under the 


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1 plan, but only to the extent that such coverage 

2 is provided under a policy for retired employees 

3 and the cost of such coverage is excludable from 

4 the retired employee’s gross income under sec5 tion 79.’’. 

6 (3) COLLECTIVELY BARGAINED LIFE INSUR7 ANCE BENEFITS DEFINED.— 

8 (A) IN GENERAL.—Paragraph (6) of sec9 tion 420(f) of such Code is amended by redesig10 nating subparagraph (D) as subparagraph (E) 

11 and by inserting after subparagraph (C) the fol12 lowing new subparagraph: 

13 ‘‘(D) COLLECTIVELY BARGAINED LIFE IN14 SURANCE BENEFITS.—The term ‘collectively 

15 bargained life insurance benefits’ means, with 

16 respect to any collectively bargained transfer— 

17 ‘‘(i) applicable life insurance benefits 

18 which are provided to retired employees 

19 who, immediately before the transfer, are 

20 entitled to receive such benefits by reason 

21 of retirement, and 

22 ‘‘(ii) if specified by the provisions of 

23 the collective bargaining agreement gov24 erning the transfer, applicable life insur25 ance benefits which will be provided at reVerDate Mar 15 2010 00:35 Mar 06, 2012 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H4143.IH H4143

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1 tirement to employees who are not retired 

2 employees at the time of the transfer.’’. 

3 (B) CONFORMING AMENDMENTS.— 

4 (i) Clause (i) of section 420(e)(1)(C) 

5 of such Code is amended by striking ‘‘upon 

6 retirement’’ and inserting ‘‘by reason of re7 tirement’’. 

8 (ii) Subparagraph (C) of section 

9 420(f)(6) of such Code is amended— 

10 (I) by striking ‘‘which are pro11 vided to’’ in the matter preceding 

12 clause (i), 

13 (II) by inserting ‘‘which are pro14 vided to’’ before ‘‘retired employees’’ 

15 in clause (i), 

16 (III) by striking ‘‘upon retire17 ment’’ in clause (i) and inserting ‘‘by 

18 reason of retirement’’, and 

19 (IV) by striking ‘‘active employ20 ees who, following their retirement,’’ 

21 and inserting ‘‘which will be provided 

22 at retirement to employees who are 

23 not retired employees at the time of 

24 the transfer and who’’. 

25 (c) MAINTENANCE OF EFFORT.— 


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1 (1) IN GENERAL.—Subparagraph (A) of section 

2 420(c)(3) of the Internal Revenue Code of 1986 is 

3 amended by inserting ‘‘, and each group-term life in4 surance plan under which applicable life insurance 

5 benefits are provided,’’ after ‘‘health benefits are 

6 provided’’. 

7 (2) CONFORMING AMENDMENTS.— 

8 (A) Subparagraph (B) of section 420(c)(3) 

9 of such Code is amended— 

10 (i) by redesignating subclauses (I) and 

11 (II) of clause (i) as subclauses (II) and 

12 (III) of such clause, respectively, and by 

13 inserting before subclause (II) of such 

14 clause, as so redesignated, the following 

15 new subclause: 

16 ‘‘(I) separately with respect to 

17 applicable health benefits and applica18 ble life insurance benefits,’’, and 

19 (ii) by striking ‘‘for applicable health 

20 benefits’’ and all that follows in clause (ii) 

21 and inserting ‘‘was provided during such 

22 taxable year for the benefits with respect 

23 to which the determination under clause (i) 

24 is made.’’. 


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1 (B) Subparagraph (C) of section 420(c)(3) 

2 of such Code is amended— 

3 (i) by inserting ‘‘for applicable health 

4 benefits’’ after ‘‘applied separately’’, and 

5 (ii) by inserting ‘‘, and separately for 

6 applicable life insurance benefits with re7 spect to individuals age 65 or older at any 

8 time during the taxable year and with re9 spect to individuals under age 65 during 

10 the taxable year’’ before the period. 

11 (C) Subparagraph (E) of section 420(c)(3) 

12 of such Code is amended— 

13 (i) in clause (i), by inserting ‘‘or re14 tiree life insurance coverage, as the case 

15 may be,’’ after ‘‘retiree health coverage’’, 

16 (ii) in clause (ii), by inserting ‘‘FOR

17 RETIREE HEALTH COVERAGE’’ after ‘‘COST

18 REDUCTIONS’’ in the heading thereof, and 

19 (iii) in clause (ii)(II), by inserting 

20 ‘‘with respect to applicable health benefits’’ 

21 after ‘‘liabilities of the employer’’. 

22 (D) Paragraph (2) of section 420(f) of 

23 such Code is amended by striking ‘‘collectively 

24 bargained retiree health liabilities’’ each place it 


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1 occurs and inserting ‘‘collectively bargained re2 tiree liabilities’’. 

3 (E) Clause (i) of section 420(f)(2)(D) of 

4 such Code is amended— 

5 (i) by inserting ‘‘, and each group6 term life insurance plan or arrangement 

7 under which applicable life insurance bene8 fits are provided,’’ in subclause (I) after 

9 ‘‘applicable health benefits are provided’’, 

10 (ii) by inserting ‘‘or applicable life in11 surance benefits, as the case may be,’’ in 

12 subclause (I) after ‘‘provides applicable 

13 health benefits’’, 

14 (iii) by striking ‘‘group health’’ in 

15 subclause (II), and 

16 (iv) by inserting ‘‘or collectively bar17 gained life insurance benefits’’ in subclause 

18 (II) after ‘‘collectively bargained health 

19 benefits’’. 

20 (F) Clause (ii) of section 420(f)(2)(D) of 

21 such Code is amended— 

22 (i) by inserting ‘‘with respect to appli23 cable health benefits or applicable life in24 surance benefits’’ after ‘‘requirements of 

25 subsection (c)(3)’’, and 


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1 (ii) by adding at the end the fol2 lowing: ‘‘Such election may be made sepa3 rately with respect to applicable health 

4 benefits and applicable life insurance bene5 fits. In the case of an election with respect 

6 to applicable life insurance benefits, the 

7 first sentence of this clause shall be ap8 plied as if subsection (c)(3) as in effect be9 fore the amendments made by such Act 

10 applied to such benefits.’’. 

11 (G) Clause (iii) of section 420(f)(2)(D) of 

12 such Code is amended— 

13 (i) by striking ‘‘retiree’’ each place it 

14 occurs, and 

15 (ii) by inserting ‘‘, collectively bar16 gained life insurance benefits, or both, as 

17 the case may be,’’ after ‘‘health benefits’’ 

18 each place it occurs. 

19 (d) COORDINATION WITH SECTION 79.—Section 79 

20 of the Internal Revenue Code of 1986 is amended by add21 ing at the end the following new subsection: 

22 ‘‘(f) EXCEPTION FOR LIFE INSURANCE PURCHASED

23 IN CONNECTION WITH QUALIFIED TRANSFER OF EXCESS

24 PENSION ASSETS.—Subsection (b)(3) and section 

25 72(m)(3) shall not apply in the case of any cost paid 


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1 (whether directly or indirectly) with assets held in an ap2 plicable life insurance account (as defined in section 

3 420(e)(4)) under a defined benefit plan.’’. 

4 (e) CONFORMING AMENDMENTS.— 

5 (1) Section 420 of the Internal Revenue Code 

6 of 1986 is amended by striking ‘‘qualified current 

7 retiree health liabilities’’ each place it appears and 

8 inserting ‘‘qualified current retiree liabilities’’. 

9 (2) Section 420 of such Code is amended by in10 serting ‘‘, or an applicable life insurance account,’’ 

11 after ‘‘a health benefits account’’ each place it ap12 pears in subsection (b)(1)(A), subparagraphs (A), 

13 (B)(i), and (C) of subsection (c)(1), subsection 

14 (d)(1)(A), and subsection (f)(2)(E)(ii). 

15 (3) Section 420(b) of such Code is amended— 

16 (A) by adding the following at the end of 

17 paragraph (2)(A): ‘‘If there is a transfer from 

18 a defined benefit plan to both a health benefits 

19 account and an applicable life insurance ac20 count during any taxable year, such transfers 

21 shall be treated as 1 transfer for purposes of 

22 this paragraph.’’, and 

23 (B) by inserting ‘‘to an account’’ after 

24 ‘‘may be transferred’’ in paragraph (3). 


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1 (4) The heading for section 420(c)(1)(B) of 

2 such Code is amended by inserting ‘‘OR LIFE INSUR3 ANCE’’ after ‘‘HEALTH BENEFITS’’. 

4 (5) Paragraph (1) of section 420(e) of such 

5 Code is amended— 

6 (A) by inserting ‘‘and applicable life insur7 ance benefits’’ in subparagraph (A) after ‘‘ap8 plicable health benefits’’, and 

9 (B) by striking ‘‘HEALTH’’ in the heading 

10 thereof. 

11 (6) Subparagraph (B) of section 420(e)(1) of 

12 such Code is amended— 

13 (A) in the matter preceding clause (i), by 

14 inserting ‘‘(determined separately for applicable 

15 health benefits and applicable life insurance 

16 benefits)’’ after ‘‘shall be reduced by the 

17 amount’’, 

18 (B) in clause (i), by inserting ‘‘or applica19 ble life insurance accounts’’ after ‘‘health ben20 efit accounts’’, and 

21 (C) in clause (i), by striking ‘‘qualified cur22 rent retiree health liability’’ and inserting 

23 ‘‘qualified current retiree liability’’. 


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1 (7) The heading for subsection (f) of section 

2 420 of such Code is amended by striking ‘‘HEALTH’’ 

3 each place it occurs. 

4 (8) Subclause (II) of section 420(f)(2)(B)(ii) of 

5 such Code is amended by inserting ‘‘or applicable 

6 life insurance account, as the case may be,’’ after 

7 ‘‘health benefits account’’. 

8 (9) Subclause (III) of section 420(f)(2)(E)(i) of 

9 such Code is amended— 

10 (A) by inserting ‘‘defined benefit’’ before 

11 ‘‘plan maintained by an employer’’, and 

12 (B) by inserting ‘‘health’’ before ‘‘benefit 

13 plans maintained by the employer’’. 

14 (10) Paragraphs (4) and (6) of section 420(f) 

15 of such Code are each amended by striking ‘‘collec16 tively bargained retiree health liabilities’’ each place 

17 it occurs and inserting ‘‘collectively bargained retiree 

18 liabilities’’. 

19 (11) Subparagraph (A) of section 420(f)(6) of 

20 such Code is amended— 

21 (A) in clauses (i) and (ii), by inserting ‘‘, 

22 in the case of a transfer to a health benefits ac23 count,’’ before ‘‘his covered spouse and depend24 ents’’, and 


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1 (B) in clause (ii), by striking ‘‘health plan’’ 

2 and inserting ‘‘plan’’. 

3 (12) Subparagraph (B) of section 420(f)(6) of 

4 such Code is amended— 

5 (A) in clause (i), by inserting ‘‘, and collec6 tively bargained life insurance benefits,’’ after 

7 ‘‘collectively bargained health benefits’’, 

8 (B) in clause (ii)— 

9 (i) by adding at the end the following: 

10 ‘‘The preceding sentence shall be applied 

11 separately for collectively bargained health 

12 benefits and collectively bargained life in13 surance benefits.’’, and 

14 (ii) by inserting ‘‘, applicable life in15 surance accounts,’’ after ‘‘health benefit 

16 accounts’’, and 

17 (C) by striking ‘‘HEALTH’’ in the heading 

18 thereof. 

19 (13) Subparagraph (E) of section 420(f)(6) of 

20 such Code, as redesignated by subsection (b), is 

21 amended— 

22 (A) by striking ‘‘bargained health’’ and in23 serting ‘‘bargained’’, 


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1 (B) by inserting ‘‘, or a group-term life in2 surance plan or arrangement for retired em3 ployees,’’ after ‘‘dependents’’, and 

4 (C) by striking ‘‘HEALTH’’ in the heading 

5 thereof. 

6 (14) Section 101(e) of the Employee Retire7 ment Income Security Act of 1974 (29 U.S.C. 

8 1021(e)) is amended— 

9 (A) in paragraphs (1) and (2), by inserting 

10 ‘‘or applicable life insurance account’’ after 

11 ‘‘health benefits account’’ each place it appears, 

12 and 

13 (B) in paragraph (1), by inserting ‘‘or ap14 plicable life insurance benefit liabilities’’ after 

15 ‘‘health benefits liabilities’’. 

16 (f) TECHNICAL CORRECTION.—Clause (iii) of section 

17 420(f)(6)(B) is amended by striking ‘‘416(I)(1)’’ and in18 serting ‘‘416(i)(1)’’. 

19 (g) REPEAL OF DEADWOOD.— 

20 (1) Subparagraph (A) of section 420(b)(1) of 

21 the Internal Revenue Code of 1986 is amended by 

22 striking ‘‘in a taxable year beginning after December 

23 31, 1990’’. 

24 (2) Subsection (b) of section 420 of such Code 

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1 ignating paragraph (5), as amended by this Act, as 

2 paragraph (4). 

3 (3) Paragraph (2) of section 420(b) of such 

4 Code, as amended by this section, is amended— 

5 (A) by striking subparagraph (B), and 

6 (B) by striking ‘‘PER YEAR.—’’ and all 

7 that follows through ‘‘No more than’’ and in8 serting ‘‘PER YEAR.—No more than’’. 

9 (4) Paragraph (2) of section 420(c) of such 

10 Code is amended— 

11 (A) by striking subparagraph (B), 

12 (B) by moving subparagraph (A) two ems 

13 to the left, and 

14 (C) by striking ‘‘BEFORE TRANSFER.—’’ 

15 and all that follows through ‘‘The requirements 

16 of this paragraph’’ and inserting the following: 

17 ‘‘BEFORE TRANSFER.—The requirements of this 

18 paragraph’’. 

19 (5) Paragraph (2) of section 420(d) of such 

20 Code is amended by striking ‘‘after December 31, 

21 1990’’. 

22 (h) EFFECTIVE DATE.— 

23 (1) IN GENERAL.—The amendments made by 

24 this section shall apply to transfers made after the 

25 date of the enactment of this Act. 


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1 (2) CONFORMING AMENDMENTS RELATING TO

2 PENSION PROTECTION ACT.—The amendments made 

3 by subsections (b)(3)(B) and (f) shall take effect as 

4 if included in the amendments made by section 

5 841(a) of the Pension Protection Act of 2006. 

Æ 


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