I 

113TH CONGRESS 

1ST SESSION H. R. 2117 

To simplify and enhance qualified retirement plans, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 22, 2013 

Mr. NEAL introduced the following bill; which was referred to the Committee 

on Ways and Means, and in addition to the Committees on Education 

and the Workforce, Armed Services, Oversight and Government Reform, 

and Transportation and Infrastructure, 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 simplify and enhance qualified retirement plans, and for 

other purposes. 

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; REFERENCE; TABLE OF CON4 TENTS. 

5 (a) SHORT TITLE.—This Act may be cited as the 

6 ‘‘Retirement Plan Simplification and Enhancement Act of 

7 2013’’. 

8 (b) AMENDMENT OF 1986 CODE.—Except as other9 wise expressly provided, whenever in this Act an amendVerDate Mar 15 2010 00:33 May 29, 2013 Jkt 029200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H2117.IH H2117

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1 ment or repeal is expressed in terms of an amendment 

2 to, or repeal of, a section or other provision, the reference 

3 shall be considered to be made to a section or other provi4 sion of the Internal Revenue Code of 1986. 

5 (c) TABLE OF CONTENTS.—The table of contents of 

6 this Act is as follows: 

Sec. 1. Short title; reference; table of contents. 

TITLE I—EXPANDING COVERAGE AND INCREASING RETIREMENT 

SAVINGS 

Sec. 101. Modification of automatic enrollment safe harbor. 

Sec. 102. Secure deferral arrangements. 

Sec. 103. Qualified cash or deferred arrangements must allow long-term employees working more than 500 but less than 1,000 hours per 

year to participate. 

Sec. 104. Separate application of top heavy rules to defined contribution plans 

covering part-time employees. 

Sec. 105. Modification of saver’s credit. 

Sec. 106. Retirement handbook and retirement readiness checklist. 

Sec. 107. Additional time to adopt a qualified plan. 

TITLE II—ENCOURAGING SMALL BUSINESSES TO ENTER AND 

REMAIN IN THE EMPLOYER RETIREMENT PLAN SYSTEM 

Sec. 201. Increase in credit limitation for small employer pension plan startup 

costs. 

Sec. 202. Eliminating barriers to use of multiple employer plans. 

TITLE III—PRESERVATION OF INCOME 

Sec. 301. Study of application of spousal consent rules to defined contribution 

plans. 

Sec. 302. Administration of joint and survivor annuity requirements. 

Sec. 303. Availability of distribution options. 

Sec. 304. Rollover of insurance contracts to IRAs. 

Sec. 305. Portability of lifetime income options. 

Sec. 306. Lost Pension Plan Registry. 

TITLE IV—SIMPLIFICATION AND CLARIFICATION OF QUALIFIED 

RETIREMENT PLAN RULES 

Sec. 401. Exception from required distributions where aggregate retirement 

savings do not exceed $100,000. 

Sec. 402. Expansion of Employee Plans Compliance Resolution System. 

Sec. 403. Use of forfeitures to fund safe harbor contributions. 

Sec. 404. Substantial cessation of operations. 

Sec. 405. Church plan clarification. 

Sec. 406. Protecting older, longer service participants. 


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Sec. 407. Review and report to the Congress relating to reporting and disclosure requirements. 

Sec. 408. Consolidation of defined contribution plan notices. 

Sec. 409. Performance benchmarks for asset allocation funds. 

Sec. 410. Permit nonspousal beneficiaries to roll assets to plans. 

Sec. 411. Eliminate the ‘‘first day of the month’’ requirement. 

TITLE V—PROVISIONS ENSURING EQUITY IN DIVORCE 

Sec. 501. Special rules relating to treatment of qualified domestic relations orders. 

Sec. 502. Elimination of current connection requirement under Railroad Retirement Act for certain survivors. 

Sec. 503. Permitting divorced spouses and widows and widowers to remarry 

after turning 60 without a penalty under Railroad Retirement 

Act. 

Sec. 504. Repeal of jurisdictional requirement for court to treat military retirement pay as property of the military member and spouse. 

Sec. 505. Modification of reductions in disposable retired pay for payments in 

compliance with court orders. 

Sec. 506. Survivor annuities for widows, widowers, and former spouses of federal employees who die before attaining age for deferred annuity under civil service retirement system. 

Sec. 507. Court orders relating to Federal retirement benefits for former 

spouses of federal employees. 

TITLE VI—OFFICE OF PARTICIPANT AND PLAN SPONSOR 

ADVOCATE 

Sec. 601. Office of Participant and Plan Sponsor Advocate. 

1 TITLE I—EXPANDING COVERAGE 

2 AND INCREASING RETIRE3 MENT SAVINGS 

4 SEC. 101. MODIFICATION OF AUTOMATIC ENROLLMENT 

5 SAFE HARBOR. 

6 (a) IN GENERAL.— 

7 (1) REMOVAL OF 10 PERCENT CAP.—Clause 

8 (iii) of section 401(k)(13)(C) is amended by striking 

9 ‘‘, does not exceed 10 percent, and is at least’’ and 

10 inserting ‘‘and is’’. 

11 (2) CONFORMING AMENDMENTS.— 


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1 (A) Subclause (I) of section 

2 401(k)(13)(C)(iii) is amended by striking ‘‘3 

3 percent’’ and inserting ‘‘at least 3 percent, but 

4 not greater than 10 percent,’’. 

5 (B) Subclause (II) of section 

6 401(k)(13)(C)(iii) is amended by striking ‘‘4 

7 percent’’ and inserting ‘‘at least 4 percent’’. 

8 (C) Subclause (III) of section 

9 401(k)(13)(C)(iii) is amended by striking ‘‘5 

10 percent’’ and inserting ‘‘at least 5 percent’’. 

11 (D) Subclause (IV) of section 

12 401(k)(13)(C)(iii) is amended by striking ‘‘6 

13 percent’’ and inserting ‘‘at least 6 percent’’. 

14 (b) EFFECTIVE DATE.—The amendments made by 

15 this section shall apply to plan years beginning after the 

16 date of enactment of this Act. 

17 SEC. 102. SECURE DEFERRAL ARRANGEMENTS. 

18 (a) IN GENERAL.—Subsection (k) of section 401 of 

19 the Internal Revenue Code of 1986 is amended by adding 

20 at the end the following new paragraph: 

21 ‘‘(14) ALTERNATIVE METHOD FOR SECURE DE22 FERRAL ARRANGEMENTS TO MEET NONDISCRIMINA23 TION REQUIREMENTS.— 


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1 ‘‘(A) IN GENERAL.—A secure deferral ar2 rangement shall be treated as meeting the re3 quirements of paragraph (3)(A)(ii). 

4 ‘‘(B) SECURE DEFERRAL ARRANGE5 MENT.—For purposes of this paragraph, the 

6 term ‘secure deferral arrangement’ means any 

7 cash or deferred arrangement which meets the 

8 requirements of subparagraphs (C), (D), and 

9 (E) of paragraph (13), except as modified by 

10 this paragraph. 

11 ‘‘(C) QUALIFIED PERCENTAGE.—For pur12 poses of this paragraph, with respect to any 

13 employee, the term ‘qualified percentage’ 

14 means, in lieu of the meaning given such term 

15 in paragraph (13)(C)(iii), any percentage deter16 mined under the arrangement if such percent17 age is applied uniformly and is— 

18 ‘‘(i) at least 6 percent, but not greater 

19 than 10 percent, during the period ending 

20 on the last day of the first plan year which 

21 begins after the date on which the first 

22 elective contribution described in para23 graph (13)(C)(i) is made with respect to 

24 such employee, 


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1 ‘‘(ii) at least 8 percent during the 

2 first plan year following the plan year de3 scribed in clause (i), and 

4 ‘‘(iii) at least 10 percent during any 

5 subsequent plan year. 

6 ‘‘(D) MATCHING CONTRIBUTIONS.— 

7 ‘‘(i) IN GENERAL.—For purposes of 

8 this paragraph, an arrangement shall be 

9 treated as having met the requirements of 

10 paragraph (13)(D)(i) if and only if the em11 ployer makes matching contributions on 

12 behalf of each employee who is not a highly 

13 compensated employee in an amount equal 

14 to the sum of 50 percent of the elective 

15 contributions of the employee to the extent 

16 that such contributions do not exceed 2 

17 percent of compensation plus 30 percent of 

18 so much of such contributions as exceed 2 

19 percent but do not exceed 10 percent of 

20 compensation. 

21 ‘‘(ii) APPLICATION OF RULES FOR

22 MATCHING CONTRIBUTIONS.—The rules of 

23 clause (ii) of paragraph (12)(B) and 

24 clauses (iii) and (iv) of paragraph (13)(D) 

25 shall apply for purposes of clause (i) but 


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1 the rule of clause (iii) of paragraph 

2 (12)(B) shall not apply for such purposes. 

3 The rate of matching contribution for each 

4 incremental deferral must be at least as 

5 high as the rate specified in clause (i), and 

6 may be higher, so long as such rate does 

7 not increase as an employee’s rate of elec8 tive contributions increases.’’. 

9 (b) MATCHING CONTRIBUTIONS AND EMPLOYEE

10 CONTRIBUTIONS.—Subsection (m) of section 401 of such 

11 Code is amended by redesignating paragraph (13) as para12 graph (14) and by adding after paragraph (12) the fol13 lowing new paragraph: 

14 ‘‘(13) ALTERNATIVE METHOD FOR SECURE DE15 FERRAL ARRAIGNMENTS.—A defined contribution 

16 plan shall be treated as meeting the requirements of 

17 paragraph (2) with respect to matching contribu18 tions and employee contributions if the plan— 

19 ‘‘(A) is a secure deferral arrangement (as 

20 defined in subsection (k)(14)), 

21 ‘‘(B) meets the requirements of clauses (ii) 

22 and (iii) of paragraph (11)(B), and 

23 ‘‘(C) provides that matching contributions 

24 on behalf of any employee may not be made 

25 with respect to an employee’s contributions or 


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1 elective deferrals in excess of 10 percent of the 

2 employee’s compensation.’’. 

3 (c) TAX CREDIT.— 

4 (1) IN GENERAL.—Subpart (D) of part IV of 

5 subchapter A of Chapter 1 of subtitle A of such 

6 Code is amended by adding at the end thereof the 

7 following new section: 

8 ‘‘SEC. 45S. SECURE DEFERRAL ARRANGEMENTS. 

9 ‘‘(a) IN GENERAL.—For purposes of section 38, in 

10 the case of an eligible employer maintaining a qualified 

11 employer plan (as defined in clauses (i) and (ii) of section 

12 4972(d)(1)(A)), the secure deferral arrangement credit 

13 determined under this section for any taxable year is an 

14 amount equal to 10 percent of all contributions under a 

15 secure deferral arrangement (as defined in section 

16 401(k)(14)) made during the plan year ending with or 

17 within the taxable year of the eligible employer by or on 

18 behalf of employees other than highly compensated em19 ployees (as defined in section 414(q)). 

20 ‘‘(b) DOLLAR LIMITATION.—The amount of the cred21 it determined under this section for any taxable year shall 

22 not exceed— 

23 ‘‘(1) $10,000 for the first credit year and each 

24 of the 2 taxable years immediately following the first 

25 credit year, and 


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1 ‘‘(2) zero for any other taxable year. 

2 ‘‘(c) FIRST CREDIT YEAR.—The term ‘first credit 

3 year’ means— 

4 ‘‘(1) the taxable year of the eligible employer 

5 with which or within which ends the first plan year 

6 during which the secure deferral arrangement was in 

7 effect for the entire year, or 

8 ‘‘(2) at the election of the eligible employer, the 

9 taxable year preceding the taxable year referred to 

10 in paragraph (1). 

11 ‘‘(d) DEFINITION AND SPECIAL RULES.— 

12 ‘‘(1) ELIGIBLE EMPLOYER.—The term ‘eligible 

13 employer’ has the meaning given such term by sec14 tion 408(p)(2)(C)(i). 

15 ‘‘(2) AGGREGATION.—All persons treated as a 

16 single employer under subsection (a) or (b) of sec17 tion 52, or subsection (m) or (o) of section 414, 

18 shall be treated as one person. All qualified employer 

19 plans of an eligible employer shall be treated as 1 

20 qualified employer plan. 

21 ‘‘(3) DISALLOWANCE OF DEDUCTION.—No de22 duction shall be allowed for that portion of the con23 tribution for the taxable year which is equal to the 

24 credit determined under subsection (a). 


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1 ‘‘(4) ELECTION NOT TO CLAIM CREDIT.—This 

2 section shall not apply to a taxpayer for any taxable 

3 year if such taxpayer elects to have this section not 

4 apply for such taxable year. Any such taxable year 

5 shall not be taken into account under subsection 

6 (b).’’. 

7 (2) CONFORMING AMENDMENTS.— 

8 (A) GENERAL BUSINESS CREDIT.—Sub9 section (b) of section 38 of such Code is amend10 ed by striking ‘‘plus’’ at the end of paragraph 

11 (35), by striking the period at the end of para12 graph (36) and inserting ‘‘, plus’’, and by add13 ing at the end the following: 

14 ‘‘(37) the secure deferral arrangement credit 

15 determined under section 45S.’’. 

16 (B) CREDIT CROSS-REFERENCES.— 

17 (i) Subsection (k) of section 401 of 

18 such Code, as amended by subsection (a), 

19 is amended at the end thereof to add the 

20 following new paragraph: 

21 ‘‘(15) SECURE DEFERRAL ARRANGEMENT

22 CREDIT.—For a general business credit with respect 

23 to secure deferral arrangements, see section 45S.’’. 

24 (ii) Subsection (m) of section 401 of 

25 such Code, as amended by subsection (b), 


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1 is amended by adding at the end the fol2 lowing new paragraph: 

3 ‘‘(15) SECURE DEFERRAL ARRANGEMENT

4 CREDIT.—For a general business credit with respect 

5 to secure deferral arrangements, see section 45S.’’. 

6 (d) FACILITATING QUALIFIED AUTOMATIC CON7 TRIBUTION ARRANGEMENTS AND SECURE DEFERRAL AR8 RAIGNMENTS.—By no later than the date that is twelve 

9 months after the date of enactment of this Act, the Sec10 retary of the Treasury shall prescribe rules that facilitate 

11 the administration of qualified automatic contribution ar12 rangements (as defined in section 401(k)(13) of the Inter13 nal Revenue Code of 1986) and secure deferral arrange14 ments (as defined in section 401(k)(14) of such Code). 

15 Such rules shall— 

16 (1) Clarify, simplify, and provide safe harbors 

17 with respect to the application of the notice require18 ments described in section 401(k)(13)(E) of such 

19 Code, especially in cases where— 

20 (A) employees become eligible under such 

21 arrangements upon becoming employed or 

22 shortly thereafter, or 

23 (B) the employer has employees subject to 

24 different payroll and administrative systems. 


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1 (2) Clarify, simplify and provide safe harbors 

2 with respect to the timing of the increases in the 

3 qualified percentage described in subclauses (II), 

4 (III), and (IV) of section 401(k)(13)(C)(iii) of such 

5 Code and in clauses (ii) and (iii) of section 

6 401(k)(14)(C) of such Code, especially in cases 

7 where the employer has employees subject to dif8 ferent payroll and administrative systems. 

9 (e) EFFECTIVE DATE.— 

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

11 subsections (a) and (b) shall apply to plan years be12 ginning after December 31, 2013. 

13 (2) TAX CREDIT.—The amendments made by 

14 subsection (c) shall apply to taxable years beginning 

15 after December 31, 2013. 

16 SEC. 103. QUALIFIED CASH OR DEFERRED ARRANGEMENTS 

17 MUST ALLOW LONG-TERM EMPLOYEES 

18 WORKING MORE THAN 500 BUT LESS THAN 

19 1,000 HOURS PER YEAR TO PARTICIPATE. 

20 (a) PARTICIPATION REQUIREMENT.— 

21 (1) IN GENERAL.—Subparagraph (D) of section 

22 401(k)(2) (defining qualified cash or deferred ar23 rangement) is amended to read as follows: 

24 ‘‘(D) which does not require, as a condi25 tion of participation in the arrangement, that 


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1 an employee complete a period of service with 

2 the employer (or employers) maintaining the 

3 plan extending beyond the close of the earlier 

4 of— 

5 ‘‘(i) the period permitted under sec6 tion 410(a)(1) (determined without regard 

7 to subparagraph (B)(i) thereof), or 

8 ‘‘(ii) subject to the provisions of para9 graph (14), the first period of 3 consecu10 tive 12-month periods during each of which 

11 the employee has at least 500 hours of 

12 service.’’. 

13 (2) SPECIAL RULES.—Section 401(k) (relating 

14 to cash or deferred arrangements) (as amended by 

15 section 102) is amended by adding at the end the 

16 following new paragraph: 

17 ‘‘(16) SPECIAL RULES FOR PARTICIPATION RE18 QUIREMENT FOR LONG-TERM, PART-TIME WORK19 ERS.—For purposes of paragraph (2)(D)(ii)— 

20 ‘‘(A) AGE REQUIREMENT MUST BE MET.— 

21 Paragraph (2)(D)(ii) shall not apply to an em22 ployee unless the employee has met the require23 ment of section 410(a)(1)(A)(i) by the close of 

24 the last of the 12-month periods described in 

25 such paragraph. 


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1 ‘‘(B) NONDISCRIMINATION AND TOP2 HEAVY RULES NOT TO APPLY.— 

3 ‘‘(i) NONDISCRIMINATION RULES.—In 

4 the case of employees who are eligible to 

5 participate in the arrangement solely by 

6 reason of paragraph (2)(D)(ii)— 

7 ‘‘(I) notwithstanding subsection 

8 (a)(4), an employer shall not be re9 quired to make nonelective or match10 ing contributions on behalf of such 

11 employees even if such contributions 

12 are made on behalf of other employees 

13 eligible to participate in the arrange14 ment, and 

15 ‘‘(II) an employer may elect to 

16 exclude such employees from the ap17 plication of subsection (a)(4), para18 graph (3), subsection (m)(2), and sec19 tion 410(b). 

20 ‘‘(ii) TOP-HEAVY RULES.—An em21 ployer may elect to exclude all employees 

22 who are eligible to participate in a plan 

23 maintained by the employer solely by rea24 son of paragraph (2)(D)(ii) from the appli25 cation of the vesting and benefit requireVerDate Mar 15 2010 00:33 May 29, 2013 Jkt 029200 PO 00000 Frm 00014 Fmt 6652 Sfmt 6201 E:\BILLS\H2117.IH H2117

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1 ments under subsections (b) and (c) of sec2 tion 416. 

3 ‘‘(iii) VESTING.—For purposes of de4 termining whether an employee described 

5 in clause (i) has a nonforfeitable right to 

6 employer contributions (other than con7 tributions described in paragraph 

8 (3)(D)(i)) under the arrangement, each 

9 12-month period for which the employee 

10 has at least 500 hours of service shall be 

11 treated as a year of service. 

12 ‘‘(iv) EMPLOYEES WHO BECOME

13 FULL-TIME EMPLOYEES.—This subpara14 graph shall cease to apply to any employee 

15 as of the first plan year beginning after 

16 the plan year in which the employee meets 

17 the requirements of section 

18 410(a)(1)(A)(ii) without regard to para19 graph (2)(D)(ii). 

20 ‘‘(C) EXCEPTION FOR EMPLOYEES UNDER

21 COLLECTIVELY BARGAINED PLANS, ETC.—Para22 graph (2)(D)(ii) shall not apply to employees 

23 described in section 410(b)(3). 

24 ‘‘(D) SPECIAL RULES.— 


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1 ‘‘(i) TIME OF PARTICIPATION.—The 

2 rules of section 410(a)(4) shall apply to an 

3 employee eligible to participate in an ar4 rangement solely by reason of paragraph 

5 (2)(D)(ii). 

6 ‘‘(ii) 12-MONTH PERIODS.—12-month 

7 periods shall be determined in the same 

8 manner as under the last sentence of sec9 tion 410(a)(3)(A).’’. 

10 (b) EFFECTIVE DATE.—The amendments made by 

11 this section shall apply to plan years beginning after De12 cember 31, 2013, except that, for purposes of section 

13 401(k)(2)(D)(ii) of the Internal Revenue Code of 1986 (as 

14 added by such amendments), 12-month periods beginning 

15 before January 1, 2014, shall not be taken into account. 

16 SEC. 104. SEPARATE APPLICATION OF TOP HEAVY RULES 

17 TO DEFINED CONTRIBUTION PLANS COV18 ERING PART-TIME EMPLOYEES. 

19 (a) IN GENERAL.—Paragraph (2) of section 416(c) 

20 is amended by adding at the end the following: 

21 ‘‘(C) SEPARATE APPLICATION TO EMPLOY22 EES NOT MEETING AGE AND SERVICE REQUIRE23 MENTS.—If employees not meeting the age or 

24 service requirements of section 410(a)(1) (with25 out regard to subparagraph (B) thereof) are 


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1 covered under a plan of the employer which 

2 meets the requirements of paragraphs (A) and 

3 (B) separately with respect to such employees, 

4 such employees may be excluded from consider5 ation in determining whether any plan of the 

6 employer meets the requirements of subpara7 graphs (A) and (B).’’. 

8 (b) EFFECTIVE DATE.—The amendment made by 

9 subsection (a) shall apply to plan years beginning after 

10 the date of the enactment of this Act. 

11 SEC. 105. MODIFICATION OF SAVER’S CREDIT. 

12 (a) 50 PERCENT CREDIT FOR ALL TAXPAYERS: EX13 PANSION OF PHASEOUT RANGES.—Subsection (b) of sec14 tion 25B is amended to read as follows: 

15 ‘‘(b) APPLICABLE PERCENTAGE.—For purposes of 

16 this section— 

17 ‘‘(1) IN GENERAL.—Except as provided in para18 graph (2), the applicable percentage is 50 percent. 

19 ‘‘(2) PHASEOUT.—The percentage under para20 graph (1) shall be reduced (but not below zero) by 

21 the number of percentage points which bears the 

22 same ratio to 50 percentage points as— 

23 ‘‘(A) the excess of— 

24 ‘‘(i) the taxpayer’s adjusted gross in25 come for such taxable year, over 


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1 ‘‘(ii) the applicable dollar amount, 

2 bears to 

3 ‘‘(B) the phaseout range. 

4 If any reduction determined under this paragraph is 

5 not a whole percentage point, such reduction shall be 

6 rounded to the nearest whole percentage point. 

7 ‘‘(3) APPLICABLE DOLLAR AMOUNT; PHASEOUT

8 RANGE.— 

9 ‘‘(A) JOINT RETURNS.—Except as pro10 vided in subparagraph (B)— 

11 ‘‘(i) the applicable dollar amount is 

12 $65,000, and 

13 ‘‘(ii) the phaseout range is $20,000. 

14 ‘‘(B) OTHER RETURNS.—In the case of— 

15 ‘‘(i) a head of a household (as defined 

16 in section 2(b)), the applicable dollar 

amount and the phaseout range shall be 3 17 ⁄4

18 of the amounts applicable under subpara19 graph (A) (as adjusted under paragraph 

20 (4)), and 

21 ‘‘(ii) any taxpayer who is not filing a 

22 joint return and who is not a head of a 

23 household (as so defined), the applicable 

24 dollar amount and the phaseout range 


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shall be 1 1 ⁄2 of the amounts applicable 

2 under subparagraph (A) (as so adjusted). 

3 ‘‘(4) INFLATION ADJUSTMENT OF APPLICABLE

4 DOLLAR AMOUNT.—In the case of any taxable year 

5 beginning in a calendar year after 2014, the dollar 

6 amount in paragraph (3)(A)(i) shall be increased by 

7 an amount equal to— 

8 ‘‘(A) such dollar amount, multiplied by 

9 ‘‘(B) the cost-of-living adjustment deter10 mined under section 1(f)(3) for the calendar 

11 year in which the taxable year begins, deter12 mined by substituting ‘calendar year 2013’ for 

13 ‘calendar year 1992’ in subparagraph (B) 

14 thereof. 

15 Any increase determined under the preceding sen16 tence shall be rounded to the nearest multiple of 

17 $500.’’. 

18 (b) CREDIT MADE REFUNDABLE; MATCHING CON19 TRIBUTIONS.— 

20 (1) CREDIT MADE REFUNDABLE.—The Internal 

21 Revenue Code of 1986 is amended by moving section 

22 25B to subpart C of part IV of subchapter A of 

23 chapter 1 of such Code (relating to refundable cred24 its), by inserting section 25B after section 36B, and 

25 by redesignating section 25B as section 36C. 


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1 (2) MATCHING CONTRIBUTIONS.—Section 36C, 

2 as redesignated by paragraph (1), is amended by 

3 adding at the end the following: 

4 ‘‘(g) MATCHING CONTRIBUTIONS.— 

5 ‘‘(1) IN GENERAL.—The credit allowed to an el6 igible individual under this section for any taxable 

7 year shall be twice the credit which would (but for 

8 this subsection) be allowed if— 

9 ‘‘(A) the individual consents to the applica10 tion of paragraph (2), and 

11 ‘‘(B) a designation by such individual is in 

12 effect for such year under paragraph (3). 

13 ‘‘(2) CREDIT PAID INTO DESIGNATED RETIRE14 MENT ACCOUNT.—Any credit under this section for 

15 any taxable year shall be paid by the Secretary into 

16 the designated retirement account of the individual 

17 for such year. The amount payable under the pre18 ceding sentence shall be subject to the reductions 

19 under section 6402 in the same manner as if such 

20 amount were an overpayment. The amount so paid 

21 shall be treated as refunded to such individual. 

22 ‘‘(3) DESIGNATED RETIREMENT ACCOUNT.— 

23 For purposes of this subsection, the term ‘des24 ignated retirement account’ means any account or 

25 plan— 


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1 ‘‘(A) of a type to which qualified retire2 ment savings contributions may be made, 

3 ‘‘(B) which is for such individual’s benefit, 

4 and 

5 ‘‘(C) which is designated by such indi6 vidual (in such form and manner as the Sec7 retary may provide) on the return of tax for the 

8 taxable year. 

9 ‘‘(4) TREATMENT OF MATCHING CONTRIBU10 TIONS.—In the case of an amount paid under para11 graph (2) into a designated retirement account— 

12 ‘‘(A) any dollar limitation otherwise appli13 cable to the amount of contributions or defer14 rals to such account shall be increased by the 

15 amount so paid, 

16 ‘‘(B) the individual’s basis in such account 

17 shall not be increased by reason of the amount 

18 so paid, and 

19 ‘‘(C) such amount shall be treated as an 

20 employer contribution for the plan year in 

21 which such amount is paid for purposes of— 

22 ‘‘(i) section 401(k)(3), and 

23 ‘‘(ii) section 408(k)(6)(A)(iii). 

24 ‘‘(5) REGULATIONS.—The Secretary shall pre25 scribe such regulations or other guidance as may be 


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1 necessary to address situations under which the Sec2 retary is not able to make a payment to a designated 

3 retirement account of an individual, including a plan 

4 of an employer for which the individual no longer 

5 works and to an account that does not exist.’’. 

6 (3) CONFORMING AMENDMENTS.— 

7 (A) Section 6211(b)(4)(A) is amended by 

8 inserting ‘‘36C,’’ after ‘‘36B,’’. 

9 (B) The table of sections for subpart A of 

10 part IV of subchapter A of chapter 1 is amend11 ed by striking the item relating to section 25B. 

12 (C) The table of sections for subpart C of 

13 such part is amended by adding at the end the 

14 following new item: 

‘‘Sec. 36C. Elective deferrals and IRA contributions by certain individuals.’’. 

15 (D) Section 1324(b)(2) of title 31, United 

16 States Code, is amended by inserting ‘‘36C,’’ 

17 after ‘‘36B,’’. 

18 (c) MAXIMUM CONTRIBUTIONS.—Subsection (a) of 

19 section 36C, as redesignated by subsection (b), is amended 

20 to read as follows: 

21 ‘‘(a) ALLOWANCE OF CREDIT.— 

22 ‘‘(1) IN GENERAL.—In the case of an eligible 

23 individual, there shall be allowed as a credit against 

24 the tax imposed by this subtitle for the taxable year 

25 an amount equal to the applicable percentage of so 


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1 much of the qualified retirement savings contribu2 tions of the eligible individual for the taxable year as 

3 do not exceed the contribution limit. 

4 ‘‘(2) CONTRIBUTION LIMIT.—For purposes of 

5 paragraph (1)— 

6 ‘‘(A) IN GENERAL.—Except as otherwise 

7 provided in this paragraph, the contribution 

8 limit is $500 ($1,500 for taxable years begin9 ning after 2023). 

10 ‘‘(B) ANNUAL INCREASES TO REACH

11 $1,500.—In the case of taxable years beginning 

12 in a calendar year after 2013 and before 2024, 

13 the contribution limit shall be the sum of— 

14 ‘‘(i) the contribution limit for taxable 

15 years beginning in the preceding calendar 

16 year (as increased under this subpara17 graph), and 

18 ‘‘(ii) $100. 

19 ‘‘(C) INFLATION ADJUSTMENT.—In the 

20 case of any taxable year beginning in a calendar 

21 year after 2023, the $1,500 amount in subpara22 graph (A) shall be increased by an amount 

23 equal to— 

24 ‘‘(i) such dollar amount, multiplied by 


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1 ‘‘(ii) the cost-of-living adjustment de2 termined under section 1(f)(3) for the cal3 endar year in which the taxable year be4 gins, determined by substituting ‘calendar 

5 year 2022’ for ‘calendar year 1992’ in sub6 paragraph (B) thereof. 

7 Any increase determined under the preceding 

8 sentence shall be rounded to the nearest mul9 tiple of $50.’’. 

10 (d) EFFECTIVE DATE.—The amendments made by 

11 this section shall apply to taxable years beginning after 

12 December 31, 2013. 

13 SEC. 106. RETIREMENT HANDBOOK AND RETIREMENT 

14 READINESS CHECKLIST. 

15 (a) IN GENERAL.—Section 704 of the Social Security 

16 Act is amended by adding at the end the following new 

17 subsection: 

18 ‘‘(f) RETIREMENT INFORMATION.— 

19 ‘‘(1) IN GENERAL.—The Commissioner, in con20 sultation with the Social Security Advisory Board, 

21 shall prepare— 

22 ‘‘(A) the financial reference handbook de23 scribed in paragraph (2), and 

24 ‘‘(B) the retirement readiness checklist de25 scribed in paragraph (3). 


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1 ‘‘(2) FINANCIAL REFERENCE HANDBOOK.—The 

2 handbook described in this paragraph is a pamphlet 

3 which— 

4 ‘‘(A) includes definitions of basic financial 

5 terms, 

6 ‘‘(B) contains a listing of financial issues 

7 and problems facing individuals who are retir8 ing and explanations of methods of dealing with 

9 the issues and problems, and 

10 ‘‘(C) is in a form readily understandable 

11 by the average retiree. 

12 ‘‘(3) READINESS CHECKLIST.—The checklist 

13 described in this paragraph is a list of questions that 

14 individuals need to consider in preparation for re15 tirement, including the following: 

16 ‘‘(A) What annual income will the indi17 vidual need in retirement? 

18 ‘‘(B) How many years will the individual 

19 live in retirement? 

20 ‘‘(C) What will be the cost of Medicare 

21 premiums? 

22 ‘‘(D) What will be the cost of insurance 

23 necessary to supplement Medicare? 

24 ‘‘(E) How will savings be invested in re25 tirement? 


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1 ‘‘(F) How will taxes affect your retirement 

2 income? 

3 The checklist will include answers to the questions 

4 or directions as to where information is available to 

5 answer the questions. All information shall be in a 

6 form readily understandable to the average recipient 

7 of the checklist. 

8 ‘‘(4) REVISIONS.—The Commissioner shall peri9 odically revise and update the handbook and check10 list prepared under this subsection. 

11 ‘‘(5) DISTRIBUTION OF MATERIALS.— 

12 ‘‘(A) HANDBOOK.—The financial reference 

13 handbook described in paragraph (2) shall be 

14 included with materials provided to an indi15 vidual when the individual first applies for ben16 efits under title II and such other times as the 

17 Commissioner determines appropriate. 

18 ‘‘(B) CHECKLIST.—The retirement readi19 ness checklist described in paragraph (3) shall 

20 be included with an individual’s annual social 

21 security account statement provided under sec22 tion 1143.’’. 

23 (b) EFFECTIVE DATE.—The amendment made by 

24 this section shall take effect on the date of the enactment 

25 of this Act, but the handbooks and checklists required to 


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1 be provided by such amendment shall be provided on or 

2 after January 1, 2014 (or such earlier date as the Com3 missioner of Social Security may provide). 

4 SEC. 107. ADDITIONAL TIME TO ADOPT A QUALIFIED PLAN. 

5 (a) IN GENERAL.—Subsection (a) of section 401 is 

6 amended by inserting after paragraph (37) the following 

7 new paragraph: 

8 ‘‘(38) The adoption of a plan by the applicable 

9 date shall not cause a plan to fail to meet the re10 quirements of this section for a plan year. For pur11 poses of the preceding sentence, the term ‘applicable 

12 date’ means the due date (including extensions) for 

13 filing the Federal income tax return for the employ14 er’s taxable year in which ends the plan year for 

15 which the plan is effective. A plan adopted in ac16 cordance with this paragraph will be treated as es17 tablished by the end of the employer’s taxable year 

18 for purposes of applying section 404(a).’’. 

19 (b) EFFECTIVE DATE.—The amendment made by 

20 subsection (a) shall apply to years beginning after Decem21 ber 31, 2013. 


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1 TITLE II—ENCOURAGING SMALL 

2 BUSINESSES TO ENTER AND 

3 REMAIN IN THE EMPLOYER 

4 RETIREMENT PLAN SYSTEM 

5 SEC. 201. INCREASE IN CREDIT LIMITATION FOR SMALL 

6 EMPLOYER PENSION PLAN STARTUP COSTS. 

7 (a) IN GENERAL.—Paragraph (1) of section 45E(b) 

8 is amended to read as follows: 

9 ‘‘(1) for the first credit year and each of the 2 

10 taxable years immediately following the first credit 

11 year, the greater of— 

12 ‘‘(A) $500, or 

13 ‘‘(B) the lesser of— 

14 ‘‘(i) $250 for each employee of the eli15 gible employer who is not a highly com16 pensated employee (as defined in section 

17 415(q)) and who is eligible to participate 

18 in the eligible employer plan maintained by 

19 the eligible employer, or 

20 ‘‘(ii) $5,000, and’’. 

21 (b) EFFECTIVE DATE.—The amendment made by 

22 this section shall apply to taxable years beginning after 

23 December 31, 2013. 


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1 SEC. 202. ELIMINATING BARRIERS TO USE OF MULTIPLE 

2 EMPLOYER PLANS. 

3 By December 31, 2013, the Secretaries of the Treas4 ury and Labor shall— 

5 (1) prescribe administrative guidance estab6 lishing conditions under which an employer partici7 pating in a plan described in section 413(c) of the 

8 Internal Revenue Code of 1986 shall not have any 

9 liability under title I of the Employee Retirement In10 come Security Act of 1974 with respect to the acts 

11 or omissions of one or more other participating em12 ployers, which regulations may require that the por13 tion of the plan attributable to such participating 

14 employers be spun off to plans maintained by such 

15 employers, 

16 (2) prescribe administrative guidance estab17 lishing conditions under which a plan described in 

18 section 413(c) of such Code may be treated as satis19 fying the qualification requirements of sections 

20 401(a) and 413(c) of such Code despite the violation 

21 of such requirements by one or more participating 

22 employers, including requiring, if appropriate, that 

23 the portion of the plan attributable to such partici24 pating employers be spun off to plans maintained by 

25 such employers, and 


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1 (3) prescribe administrative guidance providing 

2 simplified means by which plans described in section 

3 413(c) of such Code may satisfy the requirements of 

4 section 103 of the Employee Retirement Income Se5 curity Act of 1974. 

6 TITLE III—PRESERVATION OF 

7 INCOME 

8 SEC. 301. STUDY OF APPLICATION OF SPOUSAL CONSENT 

9 RULES TO DEFINED CONTRIBUTION PLANS. 

10 (a) STUDY.—The Government Accountability Office 

11 shall conduct a study of the feasibility and desirability of 

12 extending the application of the requirements of section 

13 205 of the Employee Retirement Income Security Act of 

14 1974 and sections 401(a)(11) and 417 of the Internal 

15 Revenue Code of 1986 (relating to spousal consent re16 quirements) to defined contribution plans to which such 

17 requirements do not apply. Such study shall include con18 sideration of any modifications of such requirements that 

19 are necessary to apply such requirements to such plans. 

20 (b) REPORT.—Not later than 1 year after the date 

21 of the enactment of this Act, the Government Account22 ability Office shall report the results of the study, together 

23 with any recommendations for legislative changes, to the 

24 Committees on Finance and Health, Education, Labor, 

25 and Pensions of the Senate and the Committees on Ways 


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1 and Means and Education and the Workforce of the 

2 House of Representatives. 

3 SEC. 302. ADMINISTRATION OF JOINT AND SURVIVOR AN4 NUITY REQUIREMENTS. 

5 (a) AMENDMENTS TO THE EMPLOYEE RETIREMENT

6 INCOME SECURITY ACT OF 1974.— 

7 (1) IN GENERAL.—Section 402(c) of the Em8 ployee Retirement Income Security Act of 1974 (29 

9 U.S.C. 1102(c)) is amended— 

10 (A) in paragraph (2) by striking ‘‘or’’ at 

11 the end, 

12 (B) in paragraph (3) by striking the period 

13 at the end and inserting ‘‘; or’’, and 

14 (C) by adding at the end the following new 

15 paragraph: 

16 ‘‘(4) that a named fiduciary, or a fiduciary des17 ignated by a named fiduciary pursuant to a plan 

18 procedure described in section 405(e), may appoint 

19 an annuity administrator or administrators with re20 sponsibility for administration of an individual ac21 count plan in accordance with the requirements of 

22 section 205 and payment of any annuity required 

23 thereunder.’’. 


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1 (2) Section 405 of such Act (29 U.S.C. 1105) 

2 is amended by adding at the end the following new 

3 subsection: 

4 ‘‘(e) ANNUITY ADMINISTRATOR.—If an annuity ad5 ministrator or administrators have been appointed under 

6 section 402(c)(4) and such entity acknowledges in writing 

7 that they are the annuity administrator and a fiduciary 

8 under the plan with respect to their appointed duties, then 

9 neither the named fiduciary nor any appointing fiduciary 

10 shall be liable for any act or omission of the annuity ad11 ministrator except to the extent that— 

12 ‘‘(1) the named fiduciary or appointing fidu13 ciary violated section 404(a)(1)— 

14 ‘‘(A) with respect to such allocation or des15 ignation, or 

16 ‘‘(B) in continuing the allocation or des17 ignation, 

18 ‘‘(2) the named fiduciary or appointing fidu19 ciary would otherwise be liable in accordance with 

20 subsection (a), or 

21 ‘‘(3) the entity appointed to be the annuity ad22 ministrator is neither an insurance company nor ap23 proved to be an annuity administrator by the Sec24 retary.’’. 


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1 (b) EFFECTIVE DATE.—The amendments made by 

2 subsection (a) shall apply as of the date of enactment of 

3 this Act. 

4 SEC. 303. AVAILABILITY OF DISTRIBUTION OPTIONS. 

5 (a) LIFETIME INCOME INVESTMENTS.—By the date 

6 that is one year after the date of enactment of this Act, 

7 the Secretary of the Treasury shall issue final regulations 

8 under which it is clarified that any specified age or service 

9 condition (or combination of age and service conditions) 

10 with respect to a lifetime income investment (as defined 

11 in section 401(a)(38)(B)(ii)) under a defined contribution 

12 plan shall be disregarded in determining whether such life13 time income investment is currently available to an em14 ployee for purposes of Treasury Regulation section 

15 1.401(a)(4)–4(b) (or any successor provision). 

16 (b) ENFORCEMENT.—As of the date of enactment of 

17 this Act, the Secretary of the Treasury shall administer 

18 and enforce the law in accordance with subsection (a) with 

19 respect to plan years beginning before, on, or after the 

20 date of enactment of this Act. 

21 (c) EFFECTIVE DATE.—This section shall take effect 

22 as of the date of enactment of this Act. 

23 SEC. 304. ROLLOVER OF INSURANCE CONTRACTS TO IRAS. 

24 (a) IN GENERAL.—Section 408(a)(3) is amended by 

25 inserting ‘‘other than insurance contracts that were rolled 


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1 over to an IRA from a qualified retirement plan described 

2 in clause (iii), (iv), or (vi) of section 402(c)(8)(B) provided 

3 that such contracts provide only incidental death benefits 

4 taking into account both the IRA and the qualified retire5 ment plan’’ after ‘‘contract’’. 

6 (b) EFFECTIVE DATE.—The amendment made by 

7 subsection (a) shall apply to years beginning after Decem8 ber 31, 2013. 

9 SEC. 305. PORTABILITY OF LIFETIME INCOME OPTIONS. 

10 (a) IN GENERAL.—Subsection (a) of section 401 is 

11 amended by inserting after paragraph (37) the following 

12 new paragraph: 

13 ‘‘(38) PORTABILITY OF LIFETIME INCOME.— 

14 ‘‘(A) IN GENERAL.—A trust forming part 

15 of a defined contribution plan shall not be 

16 treated as failing to constitute a qualified trust 

17 under this section solely by reason of allowing— 

18 ‘‘(i) qualified distributions of a life19 time income investment, or 

20 ‘‘(ii) distributions of a lifetime income 

21 investment in the form of a qualified plan 

22 distribution annuity contract, 

23 on or after the date that is 90 days prior to the 

24 date on which such lifetime income investment 

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1 ment option under the plan except as may oth2 erwise be provided by regulations. 

3 ‘‘(B) DEFINITIONS.—For purposes of this 

4 subsection— 

5 ‘‘(i) the term ‘qualified distribution’ 

6 means a direct trustee-to-trustee transfer 

7 to an eligible retirement plan (as defined 

8 in section 402(c)(8)(B)), as described in 

9 section 401(a)(31)(A), 

10 ‘‘(ii) the term ‘lifetime income invest11 ment’ means an investment option that is 

12 designed to provide an employee with elec13 tion rights— 

14 ‘‘(I) that are not uniformly avail15 able with respect to other investment 

16 options under the plan, and 

17 ‘‘(II) that are to a lifetime in18 come feature available through a con19 tract or other arrangement offered 

20 under the plan or under another eligi21 ble retirement plan (as defined in sec22 tion 402(c)(8)(B)) through a direct 

23 trustee-to-trustee transfer to such 

24 other eligible retirement plan under 

25 section 401(a)(31)(A), 


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1 ‘‘(iii) the term ‘lifetime income fea2 ture’ means— 

3 ‘‘(I) a feature that guarantees a 

4 minimum level of income annually (or 

5 more frequently) for at least the re6 mainder of the life of the employee or 

7 the joint lives of the employee and the 

8 employee’s designated beneficiary, or 

9 ‘‘(II) an annuity payable on be10 half of the employee under which pay11 ments are made in substantially equal 

12 periodic payments (not less frequently 

13 than annually) over the life of the em14 ployee or the joint lives of the em15 ployee and the employee’s designated 

16 beneficiary, taking into account the 

17 rules of clause (iii) of section 

18 401(a)(9)(I), and 

19 ‘‘(iv) the term ‘qualified plan distribu20 tion annuity contract’ means an annuity 

21 contract purchased for a participant and 

22 distributed to the participant by a plan de23 scribed in subparagraph (B) of section 

24 402(c)(8) (without regard to clauses (i) 

25 and (ii) thereof).’’. 


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1 (b) CASH OR DEFERRED ARRANGEMENT.—Clause (i) 

2 of section 401(k)(2)(B) is amended by striking ‘‘or’’ at 

3 the end of subclause (IV), by striking ‘‘and’’ at the end 

4 of subclause (V) and inserting ‘‘or’’, and by adding at the 

5 end of clause (i) the following: 

6 ‘‘(VI) with respect to amounts in7 vested in a lifetime income investment 

8 (as defined in section 

9 401(a)(38)(B)(ii)), the date that is 90 

10 days prior to the date that such life11 time income investment may no longer 

12 be held as an investment option under 

13 the plan, provided that any distribu14 tion under this subclause must be in 

15 the form of a qualified distribution (as 

16 defined in section 401(a)(38)(B)(i)) 

17 or a qualified plan distribution annu18 ity contract (as defined in section 

19 401(a)(38)(B)(iv)), and’’. 

20 (c) SECTION 403(b) PLANS.— 

21 (1) ANNUITY CONTRACTS.—Paragraph (11) of 

22 section 403(b) is amended by striking ‘‘or’’ at the 

23 end of subparagraph (B), by striking the period at 

24 the end of subparagraph (C), and by inserting ‘‘, 

25 or’’, and by adding at the end the following: 


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1 ‘‘(D) with respect to amounts invested in a 

2 lifetime income investment (as defined in sec3 tion 401(a)(38)(B)(ii)), the date that is 90 days 

4 prior to the date that such lifetime income in5 vestment may no longer be held as an invest6 ment option under the plan, provided that any 

7 distribution under this subparagraph must be 

8 in the form of a qualified distribution (as de9 fined in section 401(a)(38)(B)(i)) or a qualified 

10 plan distribution annuity contract (as defined in 

11 section 401(a)(38)(B)(iv)).’’. 

12 (2) CUSTODIAL ACCOUNTS.—Clause (ii) of sec13 tion 403(b)(7)(A) is amended to read as follows: 

14 ‘‘(ii) under the custodial account, no 

15 such amounts may be paid or made avail16 able to any distributee (unless such 

17 amount is a distribution to which section 

18 72(t)(2)(G) applies) before— 

19 ‘‘(I) the employee dies, 

20 ‘‘(II) the employee attains age 

591 21 ⁄2, 

22 ‘‘(III) the employee has a sever23 ance from employment, 


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1 ‘‘(IV) the employee becomes dis2 abled (within the meaning of section 

3 72(m)(7)), 

4 ‘‘(V) in the case of contributions 

5 made pursuant to a salary reduction 

6 agreement (within the meaning of sec7 tion 3121(a)(5)(D)), the employee en8 counters financial hardship, or 

9 ‘‘(VI) with respect to amounts in10 vested in a lifetime income investment 

11 (as defined in section 

12 401(a)(38)(B)(ii)), the date that is 90 

13 days prior to the date that such life14 time income investment may no longer 

15 be held as an investment option under 

16 the plan, provided that any distribu17 tion under this subparagraph must be 

18 in the form of a qualified distribution 

19 (as defined in section 

20 401(a)(38)(B)(i)) or a qualified plan 

21 distribution annuity contract (as de22 fined in section 401(a)(38)(B)(iv)).’’. 

23 (d) ELIGIBLE DEFERRED COMPENSATION PLANS.— 

24 Subparagraph (A) of section 457(d)(1) is amended by 

25 striking ‘‘or’’ at the end of clause (ii), by inserting ‘‘or’’ 


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1 at the end of clause (iii), and by adding after clause (iii) 

2 the following: 

3 ‘‘(iv) with respect to amounts invested 

4 in a lifetime income investment (as defined 

5 in section 401(a)(38)(B)(ii)), the date that 

6 is 90 days prior to the date that such life7 time income investment may no longer be 

8 held as an investment option under the 

9 plan, provided that any distribution under 

10 this subparagraph must be in the form of 

11 a qualified distribution (as defined in sec12 tion 401(a)(38)(B)(i)) or a qualified plan 

13 distribution annuity contract (as defined in 

14 section 401(a)(38)(B)(iv)),’’. 

15 (e) EFFECTIVE DATE.—The amendments made by 

16 this section shall apply to plan years beginning after De17 cember 31, 2013. 

18 SEC. 306. LOST PENSION PLAN REGISTRY. 

19 (a) IN GENERAL.—Subtitle C of title IV of the Em20 ployee Retirement Income Security Act of 1974 (29 

21 U.S.C. 1341 et seq.) is amended by adding at the end 

22 the following: 


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1 ‘‘SEC. 4051. LOST PENSION PLAN REGISTRY. 

2 ‘‘No later than December 31, 2014, the corporation 

3 shall establish a database to be known as the Lost Pension 

4 Plan Registry. The corporation shall— 

5 ‘‘(1) ensure that the database contains a record 

6 of the information described in section 6057(b) of 

7 the Internal Revenue Code of 1986 that is trans8 mitted by the Secretary of the Treasury to the cor9 poration pursuant to section 6057(d) of such Code, 

10 and 

11 ‘‘(2) post such record on the corporation’s 

12 website in a manner calculated to inform partici13 pants and beneficiaries of the name, location, and 

14 contact information for any plan that has changed 

15 its identity or status.’’. 

16 (b) AMENDMENT TO THE INTERNAL REVENUE

17 CODE.—Section 6057(d) of the Internal Revenue Code of 

18 1986 is amended by inserting ‘‘and to the Pension Benefit 

19 Guaranty Corporation’’ before the period at the end. 


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1 TITLE IV—SIMPLIFICATION AND 

2 CLARIFICATION OF QUALI3 FIED RETIREMENT PLAN 

4 RULES 

5 SEC. 401. EXCEPTION FROM REQUIRED DISTRIBUTIONS 

6 WHERE AGGREGATE RETIREMENT SAVINGS 

7 DO NOT EXCEED $100,000. 

8 (a) IN GENERAL.—Section 401(a)(9) (relating to re9 quired distributions) is amended by adding at the end the 

10 following new subparagraph: 

11 ‘‘(I) EXCEPTION FROM REQUIRED MIN12 IMUM DISTRIBUTIONS DURING LIFE OF EM13 PLOYEE OR BENEFICIARY WHERE ASSETS DO

14 NOT EXCEED $100,000.— 

15 ‘‘(i) IN GENERAL.—If, as of a meas16 urement date, the aggregate balance to the 

17 credit of an employee under all applicable 

18 eligible retirement plans does not exceed 

19 $100,000, then the requirements of sub20 paragraph (A) shall not apply to the em21 ployee during any succeeding calendar 

22 year. In addition, if, as of a measurement 

23 date, the aggregate balance to the credit of 

24 an employee under all applicable eligible 

25 retirement plans does not exceed $100,000, 


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1 then the requirements of subparagraph (B) 

2 shall not apply during any succeeding cal3 endar year to the employee’s designated 

4 beneficiary with respect to the designated 

5 beneficiary’s interest in the balance to the 

6 credit of the deceased employee. 

7 ‘‘(ii) APPLICABLE ELIGIBLE RETIRE8 MENT PLAN.—For purposes of this sub9 paragraph, the term ‘applicable eligible re10 tirement plan’ means an eligible retirement 

11 plan (as defined in section 402(c)(8)(B)) 

12 and any other plan, contract, or arrange13 ment to which the requirements of this 

14 paragraph apply. 

15 ‘‘(iii) SPECIAL RULE FOR BENEFITS

16 PAID AS A LIFE ANNUITY FROM DEFINED

17 BENEFIT PLAN.—In determining the ag18 gregate balance under clause (i), there 

19 shall not be taken into account the value of 

20 any benefits under a defined benefit plan 

21 that, on the measurement date, are being 

22 paid as a life annuity. 

23 ‘‘(iv) MEASUREMENT DATE.— 

24 ‘‘(I) INITIAL MEASUREMENT

25 DATES.—The initial measurement 


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1 date for an individual is the last day 

2 of the calendar year preceding the 

3 earlier of— 

4 ‘‘(aa) the calendar year in 

5 which the employee attains age 

701 6 ⁄2, or 

7 ‘‘(bb) the calendar year in 

8 which the employee dies. 

9 ‘‘(II) SUBSEQUENT MEASURE10 MENT DATES.—If, in a calendar year, 

11 an individual who is exempted from 

12 the requirements of this paragraph 

13 pursuant to clause (i) receives con14 tributions, rollovers, or transfers of 

15 amounts, or accrues additional bene16 fits under a defined benefit plan, that 

17 were not previously taken into account 

18 in applying this subparagraph, then 

19 the last day of that calendar year 

20 shall be a new measurement date and 

21 a new determination shall be made as 

22 to whether clause (i) applies. 

23 ‘‘(v) DETERMINING VALUE OF DE24 FINED BENEFIT PLAN BENEFITS.—The 

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1 termined in accordance with the applicable 

2 interest rate and applicable mortality rate 

3 assumptions under section 417(e), except 

4 that the value shall be equal to the amount 

5 of the single sum payment payable to the 

6 extent available under the plan. 

7 ‘‘(vi) PHASE-IN OF MINIMUM DIS8 TRIBUTION REQUIREMENTS.—For an indi9 vidual whose aggregate balance exceeds the 

10 exemption level in clause (i) by less than 

11 $10,000, required minimum distribution 

12 requirements will phase in based on the 

13 ratio of— 

14 ‘‘(I) the amount by which the ag15 gregate balance exceeds the exemption 

16 level, to 

17 ‘‘(II) $10,000. 

18 ‘‘(vii) COST OF LIVING ADJUST19 MENTS.—The Secretary shall adjust annu20 ally the $100,000 amount specified in 

21 clause (i) for increases in the cost-of-living 

22 at the same time and in the same manner 

23 as adjustments under section 415(d); ex24 cept that the base period shall be the cal25 endar quarter beginning July 1, 2013, and 


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1 any increase which is not a multiple of 

2 $5,000 shall be rounded to the next lowest 

3 multiple of $5,000.’’. 

4 (b) EFFECTIVE DATE.—The amendment made by 

5 this section shall apply to initial measurement dates occur6 ring on or after December 31, 2013. 

7 SEC. 402. EXPANSION OF EMPLOYEE PLANS COMPLIANCE 

8 RESOLUTION SYSTEM. 

9 (a) IN GENERAL.—Not later than one year after the 

10 date of the enactment of this Act, the Secretary of the 

11 Treasury shall modify the Employee Plans Compliance 

12 Resolution System (as described in Revenue Procedure 

13 2013–12) to achieve the results specified in the succeeding 

14 subsections of this section and to further facilitate correc15 tions and compliance in such other means as the Secretary 

16 deems appropriate. 

17 (b) LOAN ERROR.— 

18 (1) In the case of plan loan errors for which 

19 corrections are specified under the voluntary compli20 ance program, self-correction shall be made available 

21 by methods applicable to such loans through the vol22 untary compliance program. 

23 (2) The Secretary of Labor shall treat any loan 

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1 ing the requirements of the Voluntary Fiduciary 

2 Correction Program of the Department of Labor. 

3 (c) 457(b) PLAN CORRECTION.—The Secretary of 

4 the Treasury shall update the Employee Plans Compliance 

5 Resolution System to provide the same type of comprehen6 sive correction program that is available under such sys7 tem to retirement plans qualified under section 401(a) of 

8 the Internal Revenue Code of 1986 to plans maintained 

9 pursuant to section 457(b) of such Code by an employer 

10 described in section 457(e)(1)(A) of such Code. 

11 (d) EPCRS FOR IRAS.—The Secretary of the Treas12 ury shall expand the Employee Plans Compliance Resolu13 tion System to allow custodians of individual retirement 

14 plans to address inadvertent errors for which the owner 

15 of an individual retirement plan was not at fault, including 

16 (but not limited to)— 

17 (1) waivers of the excise tax that would other18 wise apply under section 4974 of the Internal Rev19 enue Code of 1986, 

20 (2) under the self-correction component of the 

21 Employee Plans Compliance Resolution System, 

22 waivers of the 60-day deadline for a rollover where 

23 the deadline is missed for reasons beyond the rea24 sonable control of the account owner, and 


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1 (3) rules permitting a nonspouse beneficiary to 

2 return distributions to an inherited individual retire3 ment plan described in section 408(d)(3)(C) of the 

4 Internal Revenue Code of 1986 in a case where, due 

5 to an inadvertent error by a service provider, the 

6 beneficiary had reason to believe that the distribu7 tion could be rolled over without inclusion in income 

8 of any part of the distributed amount. 

9 (e) REQUIRED MINIMUM DISTRIBUTION CORREC10 TIONS.—The Secretary of the Treasury shall expand the 

11 Employee Plans Compliance Resolution System to allow 

12 plans to which such system applies and custodians of indi13 vidual retirement plans to self-correct, without an excise 

14 tax, any inadvertent errors pursuant to which a distribu15 tion is made no more than 180 days after it was required 

16 to be made. 

17 (f) AUTOMATIC FEATURE ERROR CORRECTION.—In 

18 order to promote the adoption of automatic enrollment 

19 and automatic escalation, the Secretary of the Treasury 

20 shall modify the Employee Plans Compliance Resolution 

21 System to establish specific correction methods for errors 

22 in implementing automatic enrollment and automatic es23 calation features. 


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1 SEC. 403. USE OF FORFEITURES TO FUND SAFE HARBOR 

2 CONTRIBUTIONS. 

3 (a) IN GENERAL.—Section 401(k) (as amended by 

4 this Act) is amended by adding at the end the following 

5 new paragraph: 

6 ‘‘(17) A matching contribution or nonelective 

7 contribution described in paragraph (3)(D)(ii), sub8 paragraph (B) or (C) of paragraph (12), or para9 graph (13)(D) shall not fail to satisfy the definition 

10 under such paragraph merely because the contribu11 tion is funded in whole or in part by forfeitures.’’. 

12 (b) EFFECTIVE DATE.—The amendment made by 

13 subsection (a) shall apply to forfeitures allocated in ac14 cordance with section 401(k)(14) of the Internal Revenue 

15 Code of 1986 (as amended by subsection (a)) before, on 

16 or after the date of enactment of this Act. 

17 SEC. 404. SUBSTANTIAL CESSATION OF OPERATIONS. 

18 (a) IN GENERAL.—Subsection (e) of section 4062 of 

19 the Employee Retirement Income Security Act of 1974 is 

20 amended by striking ‘‘If an employer’’ and inserting ‘‘(1) 

21 IN GENERAL.—If an employer’’, and by adding at the end 

22 thereof the following new paragraph: 

23 ‘‘(2) SUBSTANTIAL CESSATION OF OPER24 ATIONS.—An employer shall not be treated as hav25 ing a cessation described in paragraph (1) unless— 


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1 ‘‘(A) all operations at a facility in a loca2 tion are ceased and— 

3 ‘‘(i) such cessation is reasonably ex4 pected to be permanent, 

5 ‘‘(ii) no portion of such operations is 

6 moved to another facility at a different lo7 cation, 

8 ‘‘(iii) no portion of such operations is 

9 assumed or otherwise transferred to an10 other employer, and 

11 ‘‘(iv) no other operations are reason12 ably expected to be maintained at such fa13 cility, and 

14 ‘‘(B) as a result of the cessation described 

15 in subparagraph (A), more than 20 percent of 

16 the employees of the employer have a termi17 nation of employment that is reasonably ex18 pected to be permanent. For purposes of this 

19 subparagraph, employees of the employer shall 

20 include all employees treated as employed by a 

21 single employer under sections 210(c) and 

22 (d).’’. 

23 (b) DIRECTION TO THE CORPORATION.—The Pen24 sion Benefit Guaranty Corporation shall not take any en25 forcement, administrative, or other actions pursuant to 


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1 section 4062(e) of such Act that are inconsistent with sub2 paragraph (A) of section 4062(e)(2) of such Act, as 

3 amended, without regard to whether such actions relate 

4 to a cessation or other event that occurs before or after 

5 the date of enactment of this Act. 

6 (c) EFFECTIVE DATE.—Subsection (b) and the 

7 amendment made by subsection (a) shall apply as of the 

8 date of enactment of this Act. 

9 SEC. 405. CHURCH PLAN CLARIFICATION. 

10 (a) APPLICATION OF CONTROLLED GROUP RULES TO

11 CHURCH PLANS.— 

12 (1) IN GENERAL.—Section 414(c) is amended— 

13 (A) by striking ‘‘For purposes’’ and insert14 ing the following: 

15 ‘‘(1) IN GENERAL.—For purposes’’, and 

16 (B) by adding at the end the following new 

17 paragraph: 

18 ‘‘(2) CHURCH PLANS.— 

19 ‘‘(A) GENERAL RULE.—Except as provided 

20 in subparagraphs (B) and (C), for purposes of 

21 this subsection and subsection (m), an organi22 zation that is otherwise eligible to participate in 

23 a church plan as defined in subsection (e) shall 

24 not be aggregated with another such organizaVerDate Mar 15 2010 00:33 May 29, 2013 Jkt 029200 PO 00000 Frm 00051 Fmt 6652 Sfmt 6201 E:\BILLS\H2117.IH H2117

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1 tion and treated as a single employer with such 

2 other organization unless— 

3 ‘‘(i) one such organization provides di4 rectly or indirectly at least 80 percent of 

5 the operating funds for the other organiza6 tion during the preceding tax year of the 

7 recipient organization, and 

8 ‘‘(ii) there is a degree of common 

9 management or supervision between the or10 ganizations. 

11 For purposes of this subparagraph, a degree of 

12 common management or supervision exists only 

13 if the organization providing the operating 

14 funds is directly involved in the day-to-day op15 erations of the other organization. 

16 ‘‘(B) NONQUALIFIED CHURCH-CON17 TROLLED ORGANIZATIONS.—Notwithstanding 

18 the provisions of subparagraph (A), for pur19 poses of this subsection and subsection (m), an 

20 organization that is a nonqualified church-con21 trolled organization shall be aggregated with 

22 one or more other nonqualified church-con23 trolled organizations, or with an organization 

24 that is not exempt from tax under section 501, 

25 and treated as a single employer with such 


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1 other organizations, if at least 80 percent of the 

2 directors or trustees of such organizations are 

3 either representatives of, or directly or indi4 rectly controlled by, the first organization. For 

5 purposes of this subparagraph, a ‘nonqualified 

6 church controlled organization’ shall mean a 

7 church-controlled organization described in sec8 tion 501(c)(3) that is not a qualified church9 controlled organization described in section 

10 3121(w)(3)(B). 

11 ‘‘(C) PERMISSIVE AGGREGATION AMONG

12 CHURCH-RELATED ORGANIZATIONS.—Organiza13 tions described in subparagraph (A) may elect 

14 to be treated as under common control for pur15 poses of this subsection. Such election shall be 

16 made by the church or convention or association 

17 of churches with which such organizations are 

18 associated within the meaning of section 

19 414(e)(3)(D), or by an organization determined 

20 by such church or convention or association of 

21 churches to be the appropriate organization for 

22 making such election. 

23 ‘‘(D) PERMISSIVE DISAGGREGATION OF

24 CHURCH-RELATED ORGANIZATIONS.—For pur25 poses of subparagraph (A) above, in the case of 


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1 a church plan (as defined in section 414(e)), 

2 any employer may permissively disaggregate 

3 those entities that are not churches (as defined 

4 in section 403(b)(12)(B)) separately from those 

5 entities that are churches, even if such entities 

6 maintain separate church plans. 

7 ‘‘(E) ANTI-ABUSE RULE.—For purposes of 

8 subparagraphs (A) and (B), the anti-abuse rule 

9 in Treasury Regulation section 1.414(c)–5(f) 

10 shall apply.’’. 

11 (2) EFFECTIVE DATE.—The amendments made 

12 by this subsection shall apply to taxable years begin13 ning before, on, or after the date of the enactment 

14 of this Act. 

15 (b) APPLICATION OF CONTRIBUTION AND FUNDING

16 LIMITATIONS TO 403(b) GRANDFATHERED DEFINED

17 BENEFIT PLANS.— 

18 (1) IN GENERAL.—Section 251(e)(5) of the Tax 

19 Equity and Fiscal Responsibility Act of 1982 (Public 

20 Law 97–248), is amended— 

21 (A) by striking ‘‘403(b)(2)’’ and inserting 

22 ‘‘403(b)’’, and 

23 (B) by inserting before the period at the 

24 end the following: ‘‘, and shall be subject to the 

25 applicable limitations of section 415(b) of such 


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1 Code as if it were a defined benefit plan under 

2 section 401(a) of such Code and not the limita3 tions of section 415(c) of such Code (relating to 

4 limitation for defined contribution plans).’’. 

5 (2) EFFECTIVE DATE.—The amendments made 

6 by this subsection shall apply as if included in the 

7 enactment of the Tax Equity and Fiscal Responsi8 bility Act of 1982. 

9 (c) AUTOMATIC ENROLLMENT BY CHURCH PLANS.— 

10 (1) IN GENERAL.—This subsection shall super11 sede any law of a State that relates to wage, salary, 

12 or payroll payment, collection, deduction, garnish13 ment, assignment or withholding which would di14 rectly or indirectly prohibit or restrict the inclusion 

15 in any church plan (as defined in this subsection) of 

16 an automatic contribution arrangement. 

17 (2) DEFINITION OF AUTOMATIC CONTRIBUTION

18 ARRANGEMENT.—For purposes of this subsection, 

19 the term ‘‘automatic contribution arrangement’’ 

20 means an arrangement— 

21 (A) under which a participant may elect to 

22 have the plan sponsor make payments as con23 tributions under the plan on behalf of the par24 ticipant, or to the participant directly in cash, 

25 and 


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1 (B) under which a participant is treated as 

2 having elected to have the plan sponsor make 

3 such contributions in an amount equal to a uni4 form percentage of compensation provided 

5 under the plan until the participant specifically 

6 elects not to have such contributions made (or 

7 specifically elects to have such contributions 

8 made at a different percentage). 

9 (3) NOTICE REQUIREMENTS.— 

10 (A) The plan administrator of an auto11 matic contribution arrangement shall, within a 

12 reasonable period before such plan year, provide 

13 to each participant to whom the arrangement 

14 applies for such plan year notice of the partici15 pant’s rights and obligations under the arrange16 ment which— 

17 (i) is sufficiently accurate and com18 prehensive to apprise the participant of 

19 such rights and obligations, and 

20 (ii) is written in a manner calculated 

21 to be understood by the average partici22 pant to whom the arrangement applies. 

23 (B) A notice shall not be treated as meet24 ing the requirements of subparagraph (A) with 

25 respect to a participant unless— 


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1 (i) the notice includes an explanation 

2 of the participant’s right under the ar3 rangement not to have elective contribu4 tions made on the participant’s behalf (or 

5 to elect to have such contributions made at 

6 a different percentage), 

7 (ii) the participant has a reasonable 

8 period of time, after receipt of the notice 

9 described in subparagraph (A) and before 

10 the first elective contribution is made, to 

11 make such election, and 

12 (iii) the notice explains how contribu13 tions made under the arrangement will be 

14 invested in the absence of any investment 

15 election by the participant. 

16 (4) EFFECTIVE DATE.—This subsection shall 

17 take effect on the date of the enactment of this Act. 

18 (d) ALLOW CERTAIN PLAN TRANSFERS AND MERG19 ERS.— 

20 (1) IN GENERAL.—Section 414 is amended by 

21 adding at the end the following new subsection: 

22 ‘‘(y) CERTAIN PLAN TRANSFERS AND MERGERS.— 

23 ‘‘(1) IN GENERAL.—Under rules prescribed by 

24 the Secretary, except as provided in paragraph (2), 


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1 no amount shall be includible in gross income by 

2 reason of— 

3 ‘‘(A) a transfer of all or a portion of the 

4 account balance of a participant or beneficiary, 

5 whether or not vested, from a plan described in 

6 section 401(a) or an annuity contract described 

7 in section 403(b), which is a church plan de8 scribed in section 414(e) to an annuity contract 

9 described in section 403(b), if such plan and 

10 annuity contract are both maintained by the 

11 same church or convention or association of 

12 churches, 

13 ‘‘(B) a transfer of all or a portion of the 

14 account balance of a participant or beneficiary, 

15 whether or not vested, from an annuity contract 

16 described in section 403(b) to a plan described 

17 in section 401(a) or an annuity contract de18 scribed in section 403(b), which is a church 

19 plan described in section 414(e), if such plan 

20 and annuity contract are both maintained by 

21 the same church or convention or association of 

22 churches, or 

23 ‘‘(C) a merger of a plan described in sec24 tion 401(a), or an annuity contract described in 

25 section 403(b), which is a church plan described 


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1 in section 414(e) with an annuity contract de2 scribed in section 403(b), if such plan and an3 nuity contract are both maintained by the same 

4 church or convention or association of churches. 

5 ‘‘(2) LIMITATION.—Paragraph (1) shall not 

6 apply to a transfer or merger unless the partici7 pant’s or beneficiary’s benefit immediately after the 

8 transfer or merger is equal to or greater than the 

9 participant’s or beneficiary’s benefit immediately be10 fore the transfer or merger. 

11 ‘‘(3) QUALIFICATION.—A plan or annuity con12 tract shall not fail to be considered to be described 

13 in sections 401(a) or 403(b) merely because such 

14 plan or account engages in a transfer or merger de15 scribed in this subsection. 

16 ‘‘(4) DEFINITIONS.—For purposes of this sub17 section: 

18 ‘‘(A) CHURCH.—The term ‘church’ in19 cludes an organization described in subpara20 graph (A) or (B)(ii) of subsection (e)(3). 

21 ‘‘(B) ANNUITY CONTRACT.—The term ‘an22 nuity contract’ includes a custodial account de23 scribed in section 403(b)(7) and a retirement 

24 income account described in section 

25 403(b)(9).’’. 


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1 (2) EFFECTIVE DATE.—The amendment made 

2 by this subsection shall apply to transfers or merg3 ers occurring after the date of the enactment of this 

4 Act. 

5 (e) INVESTMENTS BY CHURCH PLANS IN COLLEC6 TIVE TRUSTS.— 

7 (1) IN GENERAL.—In the case of— 

8 (A) a church plan (as defined in section 

9 414(e) of the Internal Revenue Code 1986), in10 cluding a plan described in section 401(a) of 

11 such Code and a retirement income account de12 scribed in section 403(b)(9) of such Code, and 

13 (B) an organization described in section 

14 414(e)(3)(A) of such Code the principal pur15 pose or function of which is the administration 

16 of such a plan or account, 

17 the assets of such plan, account, or organization (in18 cluding any assets otherwise permitted to be com19 mingled for investment purposes with the assets of 

20 such a plan, account, or organization) may be in21 vested in a group trust otherwise described in Inter22 nal Revenue Service Revenue Ruling 81–100 (as 

23 modified by Internal Revenue Service Revenue Rul24 ings 2004–67 and 2011–1), or any subsequent rev25 enue ruling that supersedes or modifies such revenue 


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1 ruling, without adversely affecting the tax status of 

2 the group trust, such plan, account, or organization, 

3 or any other plan or trust that invests in the group 

4 trust. 

5 (2) EFFECTIVE DATE.—This subsection shall 

6 apply to investments made after the date of the en7 actment of this Act. 

8 SEC. 406. PROTECTING OLDER, LONGER SERVICE PARTICI9 PANTS. 

10 (a) IN GENERAL.—Paragraph (4) of section 401(a) 

11 of the Internal Revenue Code of 1986 is amended to read 

12 as follows: 

13 ‘‘(4) NONDISCRIMINATION.— 

14 ‘‘(A) IN GENERAL.—A trust shall not con15 stitute a qualified trust under this section un16 less the contributions or benefits provided under 

17 the plan do not discriminate in favor of highly 

18 compensated employees (within the meaning of 

19 section 414(q)). For purposes of this para20 graph, there shall be excluded from consider21 ation employees described in section 410(b)(3) 

22 (A) and (C). 

23 ‘‘(B) PROTECTION OF OLDER, LONGER

24 SERVICE PARTICIPANTS.— 


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1 ‘‘(i)(I) A defined benefit plan de2 scribed in subclause (II) shall not fail to 

3 satisfy this paragraph with respect to plan 

4 benefits, rights, or features by reason of— 

5 ‘‘(aa) the composition of the 

6 closed class of participants described 

7 in subclause (II), or 

8 ‘‘(bb) the benefits, rights, or fea9 tures provided to such closed class. 

10 ‘‘(II) A plan is described in this sub11 clause if— 

12 ‘‘(aa) the plan provides benefits, 

13 rights, or features to a closed class of 

14 participants, 

15 ‘‘(bb) such closed class and such 

16 benefits, rights, and features satisfy 

17 the requirements of subparagraph (A) 

18 (without regard to this clause) as of 

19 the date that the class was closed, and 

20 ‘‘(cc) after the date as of which 

21 the class was closed, any plan amend22 ments that modify the closed class or 

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1 paragraph (A) (without regard to this 

2 clause). 

3 If a plan amendment causes a plan to 

4 cease to be described in this subclause (II) 

5 by reason of subclause (II)(cc), the plan is 

6 nevertheless described in this subclause 

7 (II) if such plan satisfies this subclause 

8 (II) (without regard to subclause (II)(cc)) 

9 as of the effective date of such amend10 ment. In such cases, subclauses (II)(bb) 

11 and (cc) shall subsequently be applied by 

12 reference to the effective date of the plan 

13 amendment, rather than by reference to 

14 the original date that the class was closed. 

15 ‘‘(ii)(I) A defined contribution plan 

16 described in subclause (II) shall permitted 

17 to be tested on a benefits basis. 

18 ‘‘(II) A defined contribution plan is 

19 described in this subclause if— 

20 ‘‘(aa) the plan provides make21 whole contributions to a closed class 

22 of participants whose defined benefit 

23 plan accruals have been reduced or 

24 eliminated, 


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1 ‘‘(bb) such closed class of partici2 pants satisfies section 410(b)(2)(A)(i) 

3 as of the date that the class of partici4 pants was closed, and 

5 ‘‘(cc) after the date as of which 

6 the class was closed, any plan amend7 ments that modify the closed class or 

8 the allocations, benefits, rights, and 

9 features provided to such closed class 

10 satisfy subparagraph (A) (without re11 gard to this clause). 

12 If a plan amendment causes a plan to 

13 cease to be described in this subclause (II) 

14 by reason of subclause (II)(cc), the plan is 

15 nevertheless described in this subclause 

16 (II) if such plan satisfies this subclause 

17 (II) (without regard to subclause (II)(cc)) 

18 as of the effective date of such amend19 ment. In such cases, subclause (II)(bb) 

20 and (cc) shall subsequently be applied by 

21 reference to the effective date of the plan 

22 amendment, rather than by reference to 

23 the original date that the class was closed. 

24 ‘‘(III) In addition to other testing 

25 methodologies otherwise applicable, for 


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1 purposes of determining compliance with 

2 this paragraph and with section 410(b) of 

3 the portion of one or more defined con4 tribution plans described in subclause (II) 

5 that provide make-whole contributions, 

6 such portion of such plans may be aggre7 gated and tested on a benefits basis with 

8 the portion of one or more defined con9 tribution plans that— 

10 ‘‘(aa) provides matching con11 tributions (as defined in subsection 

12 (m)(4)(A)), or 

13 ‘‘(bb) consists of an employee 

14 stock ownership plan within the mean15 ing of section 4975(e)(7) or a tax 

16 credit employee stock ownership plan 

17 within the meaning of section 409(a). 

18 For such purposes, matching contributions 

19 shall be treated in the same manner as em20 ployer contributions that are made without 

21 regard to whether an employee makes an 

22 elective contribution or employee contribu23 tion, including for purposes of applying the 

24 rules of subsection (l). 


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1 ‘‘(C) DEFINITIONS.—For purposes of this 

2 paragraph— 

3 ‘‘(i) MAKE-WHOLE CONTRIBUTIONS.— 

4 The term ‘make-whole contributions’ 

5 means allocations for each employee in the 

6 class that are reasonably calculated, in a 

7 consistent manner, to replace some or all 

8 of the retirement benefits that the em9 ployee would have received under the de10 fined benefit plan and any other plan or 

11 arrangement if the employee had continued 

12 to benefit at the same level under such de13 fined benefit plan and such other plan or 

14 arrangement. 

15 ‘‘(ii) REFERENCES TO CLOSED CLASS

16 OF PARTICIPANTS.—References to a closed 

17 class of participants and similar references 

18 to a closed class shall include arrange19 ments under which one or more classes of 

20 participants are closed. 

21 ‘‘(D) PROTECTING GRANDFATHERED PAR22 TICIPANTS IN DEFINED BENEFIT PLANS.— 

23 ‘‘(i) One or more defined benefit plans 

24 described in clause (ii) shall be permitted 


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1 to be tested on a benefits basis with one or 

2 more defined contribution plans. 

3 ‘‘(ii) A defined benefit plan is de4 scribed in this clause if— 

5 ‘‘(I) the plan provides benefits to 

6 a closed class of participants, 

7 ‘‘(II) the plan and such benefits 

8 satisfy the requirements of subpara9 graph (A) (without regard to this sub10 paragraph) as of the date the class 

11 was closed, and 

12 ‘‘(III) after the date as of which 

13 the class was closed, any plan amend14 ments that modify the closed class or 

15 the benefits provided to such closed 

16 class satisfy subparagraph (A) (with17 out regard to this subparagraph). 

18 If a plan amendment causes a plan to 

19 cease to be described in this clause (ii) by 

20 reason of subclause (III), the plan is never21 theless described in this clause (ii) if such 

22 plan satisfies this clause (ii) (without re23 gard to subclause (III)) as of the effective 

24 date of such amendment. In such cases, 

25 subclauses (II) and (III) shall subsequently 


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1 be applied by reference to the effective 

2 date of the plan amendment, rather than 

3 by reference to the original date that the 

4 class was closed. 

5 ‘‘(iii) In addition to other testing 

6 methodologies otherwise applicable, for 

7 purposes of determining compliance with 

8 this paragraph and with section 410(b) of 

9 one or more defined benefit plans described 

10 in clause (ii), such plans may be aggre11 gated and tested on a benefits basis with 

12 the portion of one or more defined con13 tribution plans that— 

14 ‘‘(I) provides matching contribu15 tions (as defined in subsection 

16 (m)(4)(A)), or 

17 ‘‘(II) consists of an employee 

18 stock ownership plan within the mean19 ing of section 4975(e)(7) or a tax 

20 credit employee stock ownership plan 

21 within the meaning of section 409(a). 

22 For such purposes, matching contributions 

23 shall be treated in the same manner as em24 ployer contributions that are made without 

25 regard to whether an employee makes an 


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1 elective contribution or employee contribu2 tion, including for purposes of applying the 

3 rules of subsection (l). 

4 ‘‘(E) RULES.—The Secretary may pre5 scribe rules designed to prevent abuse of the 

6 plan designs otherwise permitted by reason of 

7 subparagraphs (B) and (D). Such rules shall be 

8 directed towards abuses under which the de9 fined benefit plan was established within a spec10 ified period prior to the date that— 

11 ‘‘(i) the class of participants described 

12 in subparagraphs (B)(i)(II)(aa), 

13 (B)(ii)(II)(aa), and (D)(ii)(I) is closed, or 

14 ‘‘(ii) the defined benefit plan accruals 

15 have been reduced or eliminated, in the 

16 case of the make-whole contributions de17 scribed in subparagraph (C). 

18 ‘‘(F) TRANSITION RULES.—Within one 

19 year after the date of enactment of the Retire20 ment Plan Simplification and Enhancement Act 

21 of 2013, the Secretary shall prescribe rules that 

22 facilitate the use of the provisions of subpara23 graph (B) and (D) without regard to— 

24 ‘‘(i) whether the closing of the class of 

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1 graphs occurred before or after such date 

2 of enactment, or 

3 ‘‘(ii) plan amendments that were 

4 adopted or effective before such date of en5 actment and that would not have been nec6 essary if subparagraphs (B) and (D) had 

7 been in effect.’’. 

8 (b) PARTICIPATION REQUIREMENTS.—Paragraph 

9 (26) of section 401(a) of the Internal Revenue Code of 

10 1986 is amended by adding at the end the following new 

11 subparagraph: 

12 ‘‘(I) PROTECTED PARTICIPANTS.—A plan 

13 described in this subparagraph shall be deemed 

14 to satisfy the requirements of subparagraph 

15 (A). A plan is described in this paragraph if— 

16 ‘‘(i) the plan is amended to— 

17 ‘‘(I) cease all benefit accruals, or 

18 ‘‘(II) provide future benefit ac19 cruals only to a closed class of partici20 pants, and 

21 ‘‘(ii) the plan satisfies subparagraph 

22 (A) (without regard to this subparagraph) 

23 as of the effective date of the amendment. 

24 The Secretary may prescribe such rules as are 

25 necessary or appropriate to fulfill the purposes 


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1 of this subparagraph, including prevention of 

2 abuse of this subparagraph in the case of plans 

3 established within a specific period prior to the 

4 effective date of the amendment.’’. 

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

6 this section shall take effect on the date of the enactment 

7 of this Act, without regard to whether any plan modifica8 tions referenced in such amendments are adopted or effec9 tive before, on, or after such date of enactment. 

10 SEC. 407. REVIEW AND REPORT TO THE CONGRESS RELAT11 ING TO REPORTING AND DISCLOSURE RE12 QUIREMENTS. 

13 (a) STUDY.—As soon as practicable after the date of 

14 the enactment of this Act, the Secretary of Labor, the Sec15 retary of the Treasury, and the Pension Benefit Guaranty 

16 Corporation shall review the reporting and disclosure re17 quirements of— 

18 (1) title I of the Employee Retirement Income 

19 Security Act of 1974 applicable to pension plans (as 

20 defined in section 3(2) of such Act), and 

21 (2) the Internal Revenue Code of 1986 applica22 ble to qualified retirement plans (as defined in sec23 tion 4974(c) of such Code without regard to para24 graphs (4) and (5) thereof). 


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1 (b) REPORT.—Not later than 18 months after the 

2 date of the enactment of this Act, the Secretary of Labor, 

3 the Secretary of the Treasury, and the Pension Benefit 

4 Guaranty Corporation, jointly, shall make such rec5 ommendations as may be appropriate to the appropriate 

6 committees of the Congress to consolidate, simplify, stand7 ardize, and improve the applicable reporting and disclo8 sure requirements so as to simplify reporting for plans ref9 erenced to in subsection (a) and ensure that needed under10 standable information is provided to participants and 

11 beneficiaries of such plans. 

12 SEC. 408. CONSOLIDATION OF DEFINED CONTRIBUTION 

13 PLAN NOTICES. 

14 (a) IN GENERAL.— 

15 (1) Not later than 18 months after the date of 

16 the enactment of this Act, the Secretary of Labor 

17 and the Secretary of the Treasury shall adopt final 

18 regulations providing that a plan may, but is not re19 quired to, consolidate two or more of the notices re20 quired under sections 404(c)(5)(B) and 514(e)(3) of 

21 the Employee Retirement Income Security Act of 

22 1974 (29 U.S.C. 1144(e)(3)), sections 

23 401(k)(12)(D), 401(k)(13)(E), and 414(w)(4) of the 

24 Internal Revenue Code of 1986, and section 

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1 tions (29 C.F.R. 2550.404a–5) into a single notice 

2 or, to the extent provided by such regulations, con3 solidate such notices with the summary plan descrip4 tion or summary of material modifications described 

5 in section 104(b) of the Employee Retirement In6 come Security Act of 1974 (29 U.S.C. 1024(b)), so 

7 long as the combined notice, summary plan descrip8 tion or summary of material modifications includes 

9 the required content, clearly identifies the issues ad10 dressed therein, and is provided at the time and with 

11 the frequency required for each such notice. 

12 (2) The Secretary of Labor and the Secretary 

13 of the Treasury may include in such regulations 

14 rules to ensure that, to the extent such notices are 

15 consolidated with the summary plan description or 

16 summary of material modifications, the presentation, 

17 placement, or prominence of the information in such 

18 notices shall not have the effect of failing to inform 

19 participants and beneficiaries regarding the informa20 tion in such notices. 

21 (b) PROVISION OF ANNUAL NOTICES WITHOUT RE22 GARD TO PLAN YEAR.— 

23 (1) Clause (i) of section 404(c)(5)(B) of the 

24 Employee Retirement Income Security Act of 1974 

25 (29 U.S.C. 1104(c)(5)(B)) is amended— 


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1 (A) in subclause (I) by striking ‘‘within a 

2 reasonable period of time before each plan 

3 year,’’ and inserting ‘‘within a reasonable pe4 riod before the arrangement described in sub5 paragraph (A) applies to such participant or 

6 beneficiary, and thereafter at least once within 

7 any 12-month period (without regard to the 

8 plan year) during which such arrangement ap9 plies,’’, and 

10 (B) in subclause (II) by striking ‘‘and be11 fore the beginning of the plan year’’. 

12 (2) Subparagraph (A) of section 514(e)(3) of 

13 the Employee Retirement Income Security Act of 

14 1974 (29 U.S.C. 1144(e)(3)(A)) is amended by 

15 striking ‘‘, within a reasonable period before such 

16 plan year, provide to each participant to whom the 

17 arrangement applies for such plan year’’ and insert18 ing ‘‘, within a reasonable period before the arrange19 ment applies to a participant or beneficiary, and 

20 thereafter at least once within any 12-month period 

21 (without regard to the plan year) during which such 

22 arrangement applies, provide’’. 

23 (3) Clause (i) of section 401(k)(13)(E) of the 

24 Internal Revenue Code of 1986 is amended by strik25 ing ‘‘, within a reasonable period before each plan 


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1 year, each employee eligible to participate in the ar2 rangement for such year receives’’ and inserting 

3 ‘‘each employee eligible to participate in the arrange4 ment receives, within a reasonable period before the 

5 employee becomes eligible, and thereafter within a 

6 reasonable period before each plan year during 

7 which such arrangement applies,’’. 

8 (4) Subparagraph (D) of section 401(k)(12) of 

9 the Internal Revenue Code of 1986 is amended by 

10 striking ‘‘, within a reasonable period before any 

11 year, given written notice’’ and inserting ‘‘given 

12 written notice, within a reasonable period before the 

13 employee becomes eligible, and thereafter within a 

14 reasonable period before each plan year during 

15 which such arrangement applies,’’. 

16 (5) Subparagraph (A) of section 414(w)(4) of 

17 the Internal Revenue Code of 1986 is amended by 

18 striking ‘‘, within a reasonable period before each 

19 plan year, give to each employee to whom an ar20 rangement described in paragraph (3) applies for 

21 such plan year’’ and inserting ‘‘, within a reasonable 

22 period before an arrangement described in para23 graph (3) applies to an employee, and thereafter at 

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1 gard to the plan year) during which such arrange2 ment applies, give to each such employee’’. 

3 SEC. 409. PERFORMANCE BENCHMARKS FOR ASSET ALLO4 CATION FUNDS. 

5 Not later than six months after the date of enactment 

6 of this Act, the Secretary of Labor shall modify the regula7 tions under section 404 of the Employee Retirement In8 come Security Act of 1974 to provide that, in the case 

9 of a designated investment alternative that contains a mix 

10 of asset classes, a plan administrator may, but is not re11 quired to, use a benchmark that is a blend of different 

12 broad-based securities market indices if— 

13 (1) the blend is reasonably representative of the 

14 asset class holdings of the designated investment al15 ternative; 

16 (2) for purposes of determining the blend’s re17 turns for 1-, 5-, and 10-calendar year periods (or for 

18 the life of the alternative, if shorter), the blend is 

19 modified at least once per year to reflect changes in 

20 the asset class holdings of the designated investment 

21 alternative; and 

22 (3) each securities market index that is used for 

23 an associated asset class would separately satisfy the 

24 requirements of such regulations for such asset 

25 class. 


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1 SEC. 410. PERMIT NONSPOUSAL BENEFICIARIES TO ROLL 

2 ASSETS TO PLANS. 

3 (a) IN GENERAL.—Section 402(c) is amended by 

4 adding at the end the following new paragraph: 

5 ‘‘(12) DISTRIBUTIONS TO QUALIFIED PLAN OF

6 NONSPOUSE BENEFICIARY.—If, with respect to any 

7 portion of a distribution from an eligible retirement 

8 plan described in paragraph (8)(B)(iii) of a deceased 

9 employee, a direct trustee-to-trustee transfer is made 

10 to a plan or annuity described in clause (iii), (iv), 

11 (v), or (vi) of paragraph (8)(B) of an individual who 

12 is a designated beneficiary (as defined by section 

13 401(a)(9)(E)) of the employee and who is not the 

14 surviving spouse of the employee— 

15 ‘‘(A) the transfer shall be treated as an eli16 gible rollover distribution, and 

17 ‘‘(B) section 401(a)(9)(B) (other than 

18 clause (iv) thereof) shall apply to such plan.’’. 

19 (b) EFFECTIVE DATE.—The amendment made by 

20 subsection (a) shall apply to distributions made after the 

21 date of the enactment of this Act. 

22 SEC. 411. ELIMINATE THE ‘‘FIRST DAY OF THE MONTH’’ RE23 QUIREMENT. 

24 (a) IN GENERAL.—Paragraph (4) of section 457(b) 

25 is amended to read as follows: 


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1 ‘‘(4) which provides that compensation will be 

2 deferred only if an agreement providing for such de3 ferral has been entered into before the compensation 

4 is currently available to the individual,’’. 

5 (b) EFFECTIVE DATE.—The amendment made by 

6 this section shall apply to years beginning after the date 

7 of the enactment of this Act. 

8 TITLE V—PROVISIONS 

9 ENSURING EQUITY IN DIVORCE 

10 SEC. 501. SPECIAL RULES RELATING TO TREATMENT OF 

11 QUALIFIED DOMESTIC RELATIONS ORDERS. 

12 (a) PRESERVATION OF ASSETS.— 

13 (1) AMENDMENT OF 1986 CODE.—Section 

14 414(p) is amended by redesignating paragraph (13) 

15 as paragraph (14) and by inserting after paragraph 

16 (12) the following new paragraph: 

17 ‘‘(13) PRESERVATION OF ASSETS.— 

18 ‘‘(A) IN GENERAL.—If a spouse or former 

19 spouse of a participant notifies a plan in writ20 ing that— 

21 ‘‘(i) an action is pending pursuant to 

22 a State domestic relations law (including a 

23 community property law), and 

24 ‘‘(ii) all or a portion of the benefits 

25 payable with respect to the participant 


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1 under the plan are a subject of such ac2 tion, 

3 and includes with the notice evidence of the 

4 pendency of the action, the plan administrator 

5 shall, during the segregation period, separately 

6 account for 50 percent of such benefits. Any 

7 amounts so separately accounted for may not 

8 be distributed by the plan during the segrega9 tion period. 

10 ‘‘(B) SEGREGATION PERIOD.—For pur11 poses of subparagraph (A), the term ‘segrega12 tion period’ means the period— 

13 ‘‘(i) beginning on the date of the re14 ceipt of the notice, and 

15 ‘‘(ii) ending as of the close of the 90- 

16 day period beginning on such date (or, if 

17 earlier, the date of receipt of a domestic 

18 relations order with respect to the partici19 pant and the spouse or former spouse or 

20 the date the action is no longer pending). 

21 The segregation period shall be extended for 1 

22 or more additional periods described in the pre23 ceding sentence upon notice by the spouse or 

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1 paragraph (A) is still pending as of the close of 

2 any prior segregation period.’’. 

3 (2) AMENDMENT OF EMPLOYEE RETIREMENT

4 INCOME SECURITY ACT OF 1974.—Section 206(d)(3) 

5 of the Employee Retirement Income Security Act of 

6 1974 (29 U.S.C. 1056(d)(3)) is amended by redesig7 nating subparagraph (N) as subparagraph (O) and 

8 by inserting after subparagraph (M) the following 

9 new subparagraph: 

10 ‘‘(N) PRESERVATION OF ASSETS.— 

11 ‘‘(i) IN GENERAL.—If a spouse or 

12 former spouse of a participant notifies a 

13 plan in writing that— 

14 ‘‘(I) an action is pending pursu15 ant to a State domestic relations law 

16 (including a community property law), 

17 and 

18 ‘‘(II) all or a portion of the bene19 fits payable with respect to the partic20 ipant under the plan are a subject of 

21 such action, 

22 and includes with the notice evidence of 

23 the pendency of the action, the plan ad24 ministrator shall, during the segregation 

25 period, separately account for 50 percent 


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1 of such benefits. Any amounts so sepa2 rately accounted for may not be distributed 

3 by the plan during the segregation period. 

4 ‘‘(ii) SEGREGATION PERIOD.—For 

5 purposes of clause (i), the term ‘segrega6 tion period’ means the period— 

7 ‘‘(I) beginning on the date of the 

8 receipt of the notice, and 

9 ‘‘(II) ending as of the close of the 

10 90-day period beginning on such date 

11 (or, if earlier, the date of receipt of a 

12 domestic relations order with respect 

13 to the participant and the spouse or 

14 former spouse or the date the action 

15 is no longer pending). 

16 The segregation period shall be extended 

17 for 1 or more additional periods described 

18 in the preceding sentence upon notice by 

19 the spouse or former spouse that the ac20 tion described in clause (i) is still pending 

21 as of the close of any prior segregation pe22 riod.’’. 

23 (b) PENALTY FOR FAILURE TO PROVIDE INFORMA24 TION REGARDING ALTERNATE PAYEES.—Section 502(c) 

25 of the Employee Retirement Income Security Act of 1974 


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1 (29 U.S.C. 1132(c)) is amended by redesignating para2 graphs (8) and (9) as paragraphs (9) and (10), respec3 tively, and by inserting after paragraph (7) the following 

4 new paragraph: 

5 ‘‘(8) FAILURE TO PROVIDE INFORMATION RE6 GARDING ALTERNATE PAYEES.—The Secretary may 

7 assess a civil penalty against any plan administrator 

8 of up to $100 a day from the date of the plan ad9 ministrator’s failure or refusal to provide the infor10 mation the plan administrator is required to provide 

11 under regulations under this Act to prospective al12 ternative payees under a domestic relations order 

13 under section 206(d)(3) or to the Secretary or any 

14 representative of a prospective alternative payee in 

15 connection with such an order.’’. 

16 (c) ALLOCATION OF PLAN EXPENSES IN COMPLYING

17 WITH DOMESTIC RELATIONS ORDERS.— 

18 (1) AMENDMENT OF 1986 CODE.—Section 

19 414(p), as amended by subsection (a), is amended 

20 by redesignating paragraph (14) as paragraph (15) 

21 and by inserting after paragraph (13) the following 

22 new paragraph: 

23 ‘‘(14) ALLOCATION OF EXPENSES.—Any ex24 penses incurred by a plan with respect to compliance 

25 with the requirements of this subsection shall not be 


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1 allocated to an individual participant but rather 

2 shall be allocated among all participants on the basis 

3 of the relative value of each participant’s share of 

4 the assets of the plan, on the basis of a flat amount 

5 per participant, or on any other reasonable basis 

6 provided for under the plan.’’. 

7 (2) AMENDMENT OF EMPLOYEE RETIREMENT

8 INCOME SECURITY ACT OF 1974.—Section 206(d)(3) 

9 of the Employee Retirement Income Security Act of 

10 1974 (29 U.S.C. 1056(d)(3)), as amended by sub11 section (a), is amended by redesignating subpara12 graph (O) as subparagraph (P) and by inserting 

13 after subparagraph (N) the following new subpara14 graph: 

15 ‘‘(O) ALLOCATION OF EXPENSES.—Any 

16 expenses incurred by a plan with respect to 

17 compliance with the requirements of this para18 graph shall not be allocated to an individual 

19 participant but rather shall be allocated among 

20 all participants on the basis of the relative value 

21 of each participant’s share of the assets of the 

22 plan, on the basis of a flat amount per partici23 pant, or on any other reasonable basis provided 

24 for under the plan.’’. 


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1 (d) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to plan years beginning after De3 cember 31, 2013. 

4 SEC. 502. ELIMINATION OF CURRENT CONNECTION RE5 QUIREMENT UNDER RAILROAD RETIREMENT 

6 ACT FOR CERTAIN SURVIVORS. 

7 (a) IN GENERAL.—Section 2(d)(1) of the Railroad 

8 Retirement Act of 1974 (45 U.S.C. 231a(d)(1)), in the 

9 matter preceding paragraph (i), is amended by inserting 

10 ‘‘, except with respect to survivors described in paragraph 

11 (i), (ii), or (v),’’ after ‘‘December 31, 1995) and’’. 

12 (b) EFFECTIVE DATES.— 

13 (1) IN GENERAL.—The amendment made by 

14 subsection (a) shall take effect on the date of enact15 ment of this Act. 

16 (2) RETROACTIVE APPLICATION TO CERTAIN

17 SURVIVORS.—If a survivor of a deceased employee 

18 would be entitled to an annuity by reason of the 

19 amendment made by subsection (a) but for the fact 

20 that the employee died before the date of the enact21 ment of this Act, the survivor shall be entitled to 

22 such an annuity but only with respect to annuity 

23 payments for months beginning on or after such 

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1 nuity payments of other individuals to reflect any 

2 annuity payable by reason of this paragraph. 

3 SEC. 503. PERMITTING DIVORCED SPOUSES AND WIDOWS 

4 AND WIDOWERS TO REMARRY AFTER TURN5 ING 60 WITHOUT A PENALTY UNDER RAIL6 ROAD RETIREMENT ACT. 

7 (a) IN GENERAL.— 

8 (1) DIVORCED SPOUSE.—Section 2(c)(4) of the 

9 Railroad Retirement Act of 1974 (45 U.S.C. 

10 231a(c)(4)) is amended by adding at the end the fol11 lowing new sentence: ‘‘For purposes of paragraph 

12 (ii)(B), if a divorced wife marries after attaining age 

13 60, such marriage shall be deemed not to have oc14 curred.’’. 

15 (2) WIDOWS AND WIDOWERS.—Section 

16 2(d)(1)(v) of the Railroad Retirement Act of 1974 

17 (45 U.S.C. 231a(d)(1)(v)) is amended by adding at 

18 the end the following new sentence: ‘‘For purposes 

19 of this paragraph, if a widow marries after attaining 

20 age 60, such marriage shall be deemed not to have 

21 occurred.’’. 

22 (b) EFFECTIVE DATES.— 

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

24 this section shall take effect on the date of enact25 ment of this Act. 


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1 (2) RETROACTIVE APPLICATION.—If a divorced 

2 wife, widow, or widower would be entitled to an an3 nuity by reason of the amendments made by this 

4 section but for the fact the individual was married 

5 before the date of the enactment of this Act, the in6 dividual shall be entitled to such an annuity but only 

7 with respect to annuity payments for months begin8 ning on or after such date. Appropriate adjustments 

9 shall be made in annuity payments of other individ10 uals to reflect any annuity payable by reason of this 

11 paragraph. 

12 SEC. 504. REPEAL OF JURISDICTIONAL REQUIREMENT FOR 

13 COURT TO TREAT MILITARY RETIREMENT 

14 PAY AS PROPERTY OF THE MILITARY MEM15 BER AND SPOUSE. 

16 (a) IN GENERAL.—Section 1408(c) of title 10, 

17 United States Code, is amended by striking paragraph (4). 

18 (b) EFFECTIVE DATE.—The amendment made by 

19 this section shall apply to final decrees issued on or after 

20 the date of the enactment of this Act. 


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1 SEC. 505. MODIFICATION OF REDUCTIONS IN DISPOSABLE 

2 RETIRED PAY FOR PAYMENTS IN COMPLI3 ANCE WITH COURT ORDERS. 

4 (a) IN GENERAL.—Section 1408(d) of title 10, 

5 United States Code, is amended by adding at the end the 

6 following new paragraph: 

7 ‘‘(8) Notwithstanding subsection (a)(4) or 

8 (e)(1), if the disposable retired pay of a member is 

9 reduced under subparagraph (B) of subsection 

10 (a)(4) as a result of a waiver required to receive 

11 compensation under title 38, or is reduced under 

12 subparagraph (C) of subsection (a)(4), the Secretary 

13 concerned shall pay (subject to any other limitation 

14 under this section) to the spouse or former spouse 

15 the lesser of— 

16 ‘‘(A) the amount payable under the final 

17 court order from the disposable retired pay (de18 termined without regard to such reductions), or 

19 ‘‘(B) 100 percent of the disposable retired 

20 pay (determined after such reductions).’’. 

21 (b) EFFECTIVE DATE.—The amendment made by 

22 this section shall apply to payments of disposable retired 

23 pay attributable to periods beginning on or after the date 

24 of the enactment of this Act with respect to final court 

25 orders issued on, before, or after such date. 


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1 SEC. 506. SURVIVOR ANNUITIES FOR WIDOWS, WIDOWERS, 

2 AND FORMER SPOUSES OF FEDERAL EM3 PLOYEES WHO DIE BEFORE ATTAINING AGE 

4 FOR DEFERRED ANNUITY UNDER CIVIL 

5 SERVICE RETIREMENT SYSTEM. 

6 (a) DEFINITION.—Section 8341(a) of title 5, United 

7 States Code, is amended— 

8 (1) in paragraph (1), by striking ‘‘employee or 

9 Member’’ and inserting ‘‘employee, Member, or an10 nuitant, or of a former employee or Member,’’; and 

11 (2) in paragraph (2), by striking ‘‘employee or 

12 Member’’ and inserting ‘‘employee, Member, or an13 nuitant, or of a former employee or Member,’’. 

14 (b) BENEFITS FOR WIDOW, WIDOWER, OR FORMER

15 SPOUSE.— 

16 (1) IN GENERAL.—Section 8341 of title 5, 

17 United States Code, is amended by adding at the 

18 end the following: 

19 ‘‘(l) If a former employee heretofore or hereafter sep20 arated from the service with title to deferred annuity from 

21 the Fund hereafter dies before having established a valid 

22 claim for annuity and is survived by a widow or widower 

23 to whom married at the date of separation, the widow or 

24 widower— 

25 ‘‘(1) is entitled to an annuity equal to 55 per26 cent of the deferred annuity of the former employee 


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1 commencing on the day after the former employee 

2 dies and terminating on the last day of the month 

3 before the widow or widower dies or remarries before 

4 becoming 55 years of age; or 

5 ‘‘(2) may elect to receive the lump-sum credit 

6 instead of annuity if the widow or widower is the in7 dividual who would be entitled to the lump-sum 

8 credit and files application therefor with the Office 

9 before the award of the annuity. 

10 Notwithstanding the preceding sentence, an annuity 

11 payable under this subsection to the widow or wid12 ower of a former employee may not exceed the dif13 ference between— 

14 ‘‘(A) the annuity which would otherwise be 

15 payable to such widow or widower under this 

16 subsection, and 

17 ‘‘(B) the amount of the survivor annuity 

18 payable to any former spouse of such former 

19 employee under subsection (h) of this section.’’. 

20 (2) TECHNICAL AND CONFORMING AMEND21 MENTS.—Section 8339(j) of title 5, United States 

22 Code, is amended— 

23 (A) in paragraph (3)(A)(ii), by striking 

24 ‘‘and (h)’’ and inserting ‘‘(h), and (l)’’; and 


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1 (B) in paragraph (4), by striking ‘‘and 

2 (h)’’ and inserting ‘‘(h), and (l)’’. 

3 (c) BENEFITS FOR FORMER SPOUSE.—Section 

4 8341(h) of title 5, United States Code, is amended— 

5 (1) in paragraph (1), by adding after the first 

6 sentence ‘‘Subject to paragraphs (2) through (5) of 

7 this subsection, a former spouse of a former em8 ployee who dies after having separated from the 

9 service with title to a deferred annuity under section 

10 8338(a) but before having established a valid claim 

11 for annuity is entitled to a survivor annuity under 

12 this subsection, if and to the extent expressly pro13 vided for in an election under section 8339(j)(3) of 

14 this title, or in the terms of any decree of divorce 

15 or annulment or any court order or court-approved 

16 property settlement agreement incident to such de17 cree.’’; and 

18 (2) in paragraph (2)— 

19 (A) in subparagraph (A)(ii), by striking 

20 ‘‘or annuitant,’’ and inserting ‘‘annuitant, or 

21 former employee’’; and 

22 (B) in subparagraph (B)— 

23 (i) in clause (ii), by striking ‘‘or’’ at 

24 the end; 


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1 (ii) in clause (iii), by striking the pe2 riod and inserting ‘‘; or’’; and 

3 (iii) by adding at the end the fol4 lowing: 

5 ‘‘(iv) under subparagraph (A) of sub6 section (l) of this section in the case of a 

7 widow or widower, if the deceased was a 

8 former employee described in the first sen9 tence of such subsection.’’. 

10 (d) PROTECTION OF SURVIVOR BENEFIT RIGHTS.— 

11 Section 8339(j)(3) of title 5, United States Code, is 

12 amended by inserting at the end the following: ‘‘The Office 

13 shall provide by regulation for the application of this sub14 section to the widow, widower, or surviving former spouse 

15 of a former employee who dies after having separated from 

16 the service with title to a deferred annuity under section 

17 8338(a) but before having established a valid claim for 

18 annuity.’’. 

19 (e) EFFECTIVE DATE.—The amendments made by 

20 this section shall take effect on the date of the enactment 

21 of this Act and shall apply only in the case of a former 

22 employee who dies on or after such date. 


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1 SEC. 507. COURT ORDERS RELATING TO FEDERAL RETIRE2 MENT BENEFITS FOR FORMER SPOUSES OF 

3 FEDERAL EMPLOYEES. 

4 (a) CIVIL SERVICE RETIREMENT SYSTEM.—Section 

5 8345(j) of title 5, United States Code, is amended— 

6 (1) by redesignating paragraph (3) as para7 graph (4); and 

8 (2) by inserting after paragraph (2) the fol9 lowing: 

10 ‘‘(3)(A) A court decree, court order, property 

11 settlement, or similar process referred to under 

12 paragraph (1)(A) shall be treated as meeting the re13 quirements of that paragraph if it requires that pay14 ment of benefits be made to the former spouse of 

15 the employee, Member, or annuitant— 

16 ‘‘(i) in the case of any payment before the 

17 employee, Member, or annuitant has separated 

18 from service, on or after the date on which the 

19 employee, Member, or annuitant attains (or 

20 would have attained) the earliest retirement 

21 age, 

22 ‘‘(ii) as if the employee, Member, or annu23 itant had retired on the date on which such 

24 payment is to begin under such order (but tak25 ing into account only the present value of the 

26 benefits actually accrued and not taking into 


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1 account the present value of any employer sub2 sidy for early retirement), and 

3 ‘‘(iii) in any form in which such benefits 

4 may be paid under this chapter to the em5 ployee, Member, or annuitant (other than in the 

6 form of a joint and survivor annuity with re7 spect to the former spouse and his or her subse8 quent spouse). 

9 For purposes of clause (ii), the interest rate assump10 tion used in determining the present value shall be 

11 the interest rate specified under this subchapter or, 

12 if no rate is specified, 5 percent. 

13 ‘‘(B) In this paragraph, the term ‘earliest re14 tirement age’ means the earlier of— 

15 ‘‘(i) the date on which the employee, Mem16 ber, or annuitant is entitled to a distribution 

17 under this subchapter, or 

18 ‘‘(ii) the later of— 

19 ‘‘(I) the date the employee, Member, 

20 or annuitant attains age 50, or 

21 ‘‘(II) the earliest date on which the 

22 employee, Member, or annuitant could 

23 begin receiving benefits under this chapter 

24 if the employee, Member, or annuitant sep25 arated from service.’’. 


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1 (b) FEDERAL EMPLOYEES RETIREMENT SYSTEM.— 

2 Section 8467 of title 5, United States Code, is amended— 

3 (1) by redesignating subsection (c) as sub4 section (d); and 

5 (2) by inserting after subsection (b) the fol6 lowing: 

7 ‘‘(c)(1) A court decree, court order, property settle8 ment, or similar process referred to under subsection 

9 (a)(1) shall be treated as meeting the requirements of that 

10 subsection if it requires that payment of benefits be made 

11 to the former spouse of the employee, Member, or annu12 itant— 

13 ‘‘(A) in the case of any payment before the em14 ployee, Member, or annuitant has separated from 

15 service, on or after the date on which the employee, 

16 Member, or annuitant attains (or would have at17 tained) the earliest retirement age, 

18 ‘‘(B) as if the employee, Member, or annuitant 

19 had retired on the date on which such payment is 

20 to begin under such order (but taking into account 

21 only the present value of the benefits actually ac22 crued and not taking into account the present value 

23 of any employer subsidy for early retirement), and 

24 ‘‘(C) in any form in which such benefits may be 

25 paid under this chapter to the employee, Member, or 


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1 annuitant (other than in the form of a joint and sur2 vivor annuity with respect to the alternate payee and 

3 his or her subsequent spouse). 

4 For purposes of subparagraph (B), the interest rate as5 sumption used in determining the present value shall be 

6 the interest rate specified under this chapter or, if no rate 

7 is specified, 5 percent. 

8 ‘‘(2) In this subsection, the term ‘earliest retirement 

9 age’ means the earlier of— 

10 ‘‘(A) the date on which the employee, Member, 

11 or annuitant is entitled to a distribution under this 

12 chapter, or 

13 ‘‘(B) the later of— 

14 ‘‘(i) the date the employee, Member, or an15 nuitant attains age 50, or 

16 ‘‘(ii) the earliest date on which the em17 ployee, Member, or annuitant could begin re18 ceiving benefits under this chapter if the em19 ployee, Member, or annuitant separated from 

20 service.’’. 

21 (c) EFFECTIVE DATE AND APPLICATION.—The 

22 amendments made by this section shall take effect on the 

23 date of the enactment of this Act and apply to any court 

24 decree, court order, property settlement, or similar process 

25 issued or approved before, on, or after that date. 


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1 TITLE VI—OFFICE OF PARTICI2 PANT AND PLAN SPONSOR 

3 ADVOCATE 

4 SEC. 601. OFFICE OF PARTICIPANT AND PLAN SPONSOR AD5 VOCATE. 

6 (a) IN GENERAL.—Section 7803 is amended by add7 ing at the end the following: 

8 ‘‘(e) PARTICIPANT AND PLAN SPONSOR ADVO9 CATE.— 

10 ‘‘(1) IN GENERAL.—There is established in the 

11 Internal Revenue Service an office to be known as 

12 the ‘Office of the Participant and Plan Sponsor Ad13 vocate’. 

14 ‘‘(2) PARTICIPANT AND PLAN SPONSOR ADVO15 CATE.— 

16 ‘‘(A) IN GENERAL.—The Office of the Par17 ticipant and Plan Sponsor Advocate shall be 

18 under the supervision and direction of an offi19 cial to be known as the ‘Participant and Plan 

20 Sponsor Advocate’. The Commissioner shall se21 lect the Participant and Plan Sponsor Advocate 

22 without regard to the provisions of title 5, 

23 United States Code, relating to appointments in 

24 the competitive service or Senior Executive 

25 Service. 


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1 ‘‘(B) DUTIES.—The Participant and Plan 

2 Sponsor Advocate shall— 

3 ‘‘(i) act as a liaison between the Inter4 nal Revenue Service, sponsors of sponsors 

5 of qualified retirement plans (as defined in 

6 section 4974(c)), and participants in such 

7 plans; 

8 ‘‘(ii) advocate for the full attainment 

9 of the rights of such plan sponsors and 

10 participants; 

11 ‘‘(iii) assist pension plan sponsors and 

12 participants in resolving disputes with the 

13 Internal Revenue Service; 

14 ‘‘(iv) identify areas in which partici15 pants and plan sponsors have persistent 

16 problems in dealings with the Internal Rev17 enue Service; 

18 ‘‘(v) to the extent possible, propose 

19 changes in the administrative practices of 

20 the Internal Revenue Service to mitigate 

21 problems; 

22 ‘‘(vi) identify potential legislative 

23 changes which may be appropriate to miti24 gate problems; and 


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1 ‘‘(vii) refer instances of fraud, waste, 

2 and abuse, and violations of law to the Of3 fice of the Treasury Inspector General for 

4 Tax Administration. 

5 ‘‘(C) REMOVAL.—If the Participant and 

6 Plan Sponsor Advocate is removed from office 

7 or is transferred to another position or location 

8 within the Internal Revenue Service, the Com9 missioner shall communicate in writing the rea10 sons for any such removal or transfer to Con11 gress not less than 30 days before the removal 

12 or transfer. Nothing in this paragraph shall 

13 prohibit a personnel action otherwise authorized 

14 by law, other than transfer or removal. 

15 ‘‘(D) COMPENSATION.—The annual rate of 

16 basic pay for the Participant and Plan Sponsor 

17 Advocate shall be the same rate as the highest 

18 rate of basic pay established for the Senior Ex19 ecutive Service under section 5382 of title 5, 

20 United States Code, or, if the Commissioner so 

21 determines, at a rate fixed under section 9503 

22 of such title. 

23 ‘‘(3) ANNUAL REPORT.— 

24 ‘‘(A) IN GENERAL.—Not later than De25 cember 31 of each calendar year, the ParticiVerDate Mar 15 2010 00:33 May 29, 2013 Jkt 029200 PO 00000 Frm 00098 Fmt 6652 Sfmt 6201 E:\BILLS\H2117.IH H2117

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1 pant and Plan Sponsor Advocate shall report to 

2 the Health, Education, Labor, and Pensions 

3 Committee of the Senate, the Committee on Fi4 nance of the Senate, the Committee on Edu5 cation and the Workforce of the House of Rep6 resentatives, and the Committee on Ways and 

7 Means of the House of Representatives on the 

8 activities of the Office of the Participant and 

9 Plan Sponsor Advocate during the fiscal year 

10 ending during such calendar year. 

11 ‘‘(B) CONTENT.—Each report submitted 

12 under subparagraph (A) shall— 

13 ‘‘(i) summarize the assistance re14 quests received from participants and plan 

15 sponsors and describe the activities, and 

16 evaluate the effectiveness, of the Partici17 pant and Plan Sponsor Advocate during 

18 the preceding year; 

19 ‘‘(ii) identify significant problems the 

20 Participant and Plan Sponsor Advocate 

21 has identified; 

22 ‘‘(iii) include specific legislative and 

23 regulatory changes to address the prob24 lems; and 


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1 ‘‘(iv) identify any actions taken to cor2 rect problems identified in any previous re3 port. 

4 ‘‘(C) CONCURRENT SUBMISSION.—The 

5 Participant and Plan Sponsor Advocate shall 

6 submit a copy of each report to the Secretary 

7 of the Treasury, the Commissioner of Internal 

8 Revenue, and any other appropriate official at 

9 the same time such report is submitted to the 

10 committees of Congress under subparagraph 

11 (A).’’. 

12 (b) EFFECTIVE DATE.—The amendment made by 

13 this section shall take effect on January 1, 2014. 

Æ 


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