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[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5546 Introduced in House (IH)]

106th CONGRESS
  2d Session
                                H. R. 5546

 To amend the Internal Revenue Code of 1986 to improve the retirement 
                     security of American families.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                            October 25, 2000

 Mr. Andrews (for himself, Mr. Clay, Mr. Kildee, Mr. Owens, Mr. Payne, 
 Mrs. Mink of Hawaii, Ms. Woolsey, Mr. Romero-Barcelo, Mr. Fattah, Mr. 
 Tierney, Mr. Kind, Ms. Sanchez, Mr. Ford, Mr. Kucinich, and Mr. Holt) 
 introduced the following bill; which was referred to the Committee on 
                             Ways and Means

_______________________________________________________________________

                                 A BILL

 
 To amend the Internal Revenue Code of 1986 to improve the retirement 
                     security of American families.

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

SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Retirement 
Enhancement Revenue Act of 2000''.
    (b) Table of Contents.--The table of contents is as follows:

Sec. 1. Short title and table of contents.
                 TITLE I--PUBLIC EMPLOYEE PENSION PLANS

Sec. 101. New qualification requirements for public employee pension 
               ``subpart f--public employee pension plans
        ``Sec. 420A. Reporting and disclosure requirements.
        ``Sec. 420B. Review by qualified review boards of changes in 
                            employer contributions.
        ``Sec. 420C. Effect on other laws.
        ``Sec. 420D. Definitions and coverage.
Sec. 102. Effective date of title.
                     TITLE II--PENSION IMPROVEMENTS

Sec. 201. Automatic enrollment of all employees in 401(k) plans.
Sec. 202. Improvements in simplified employee pensions.
Sec. 203. Pension integration rules.
Sec. 204. Increase to age 75 for beginning mandatory distributions.
Sec. 205. Treatment of multiemployer plans under section 415.
Sec. 206. Restrictions on exclusion of unionized employees from 
                            participation in 401(k) plans.
Sec. 207. Repeal of coordination requirements for deferred compensation 
                            plans of State and local governments and 
                            tax-exempt organizations.
Sec. 208. Clarification of tax treatment of division of section 457 
                            plan benefits upon divorce.
Sec. 209. Rollovers allowed among various types of plans.
Sec. 210. Purchase of service credit in governmental defined benefit 
                            plans.
                    TITLE III--ADDITIONAL AMENDMENTS

Sec. 301. Involuntary cash-outs from section 457 plans permitted only 
                            if distribution rolled to a qualified plan.
Sec. 302. Statutory exemption from prohibited transaction rules for 
                            emergent transactions.
Sec. 303. Loans from retirement plans for health insurance and job 
                            training expenses.
Sec. 304. Missing participants.
Sec. 305. Income averaging of corrected civil service annuity benefit 
                            payments.
                      TITLE IV--GENERAL PROVISIONS

Sec. 401. General effective date.
Sec. 402. Plan amendments.

                 TITLE I--PUBLIC EMPLOYEE PENSION PLANS

SEC. 101. NEW QUALIFICATION REQUIREMENTS FOR PUBLIC EMPLOYEE PENSION 
              PLANS.

    Sec. (a) In General.--Subsection (a) of section 401 of the Internal 
Revenue Code of 1986 (relating to requirements for qualification) is 
amended by inserting after paragraph (34) the following new paragraph:
            ``(35) Public employee pension plans.--A trust forming a 
        part of a public employee pension plan (as defined in section 
        420D(a)(9)) shall not constitute a qualified trust under this 
        section unless the requirements of subpart F of this part are 
        met in connection with such plan.''
    (b) Requirements.--
            (1) In general.--Part I of subchapter D of chapter 1 of 
        such Code (relating to pension, profit-sharing, stock bonus 
        plans, etc.) is amended by inserting after subpart E the 
        following new subpart:

               ``Subpart F--Public Employee Pension Plans

                              ``Sec. 420A. Reporting and disclosure 
                                        requirements.
                              ``Sec. 420B. Review by qualified review 
                                        boards of changes in employer 
                                        contributions.
                              ``Sec. 420C. Effect on other laws.
                              ``Sec. 420D Definitions and coverage.

``SEC. 420A. REPORTING AND DISCLOSURE REQUIREMENTS.

    ``(a) In General.--The requirements of this subsection are met in 
connection with a public employee pension plan if the terms of the plan 
include the requirements of this section.
    ``(b) Required Disclosures.--The plan shall provide that, within 
210 days after the close of each plan year, the administrator of the 
plan shall furnish to each participant, and to each beneficiary 
receiving benefits under the plan--
            ``(1) a statement of the assets and liabilities of the plan 
        aggregated by categories and valued at their current value, and 
        the same data displayed in comparative form for the end of the 
        previous plan year;
            ``(2) a statement of receipts and disbursements during the 
        preceding 12-month period aggregated by general sources and 
        applications;
            ``(3) a report containing--
                    ``(A) a description of all investments and assets 
                of the plan, including their value;
                    ``(B) the names and positions of all of the 
                trustees of the plan, and the time remaining before the 
                expiration of their term;
                    ``(C) a description of the method of trustee 
                selection;
                    ``(D) a description of any changes in investment 
                policy of the plan during the fiscal year;
                    ``(E) an evaluation of the long-term solvency of 
                the plan, including the number of participants and 
                beneficiaries and a summary of their benefits, and a 
                projection of the amount of benefits expected to be 
                paid for the fifth, tenth, and fifteenth plan year 
                following the date of the publication of the report; 
                and
                    ``(F) the percentage which the current value of the 
                assets of the plan is of the current liability under 
                the plan; and
            ``(4) any other material as is necessary to fairly 
        summarize the latest annual report.
Such information shall be written and calculated to be understood by 
the average plan participant, and shall be sufficiently accurate and 
comprehensive to reasonably apprise such participants and beneficiaries 
of their rights and obligations under the plan.
    ``(c) Availability of Plan Documents for Examination.--The plan 
shall provide that the administrator shall make copies of the plan 
description and the latest annual report and the bargaining agreement, 
trust agreement, contract, or other instruments under which the plan 
was established or is operated available for examination by any plan 
participant or beneficiary in the principal office of the administrator 
and in such other places as may be necessary to make available all 
pertinent information to all participants (including such places as the 
Secretary may prescribe by regulations).
    ``(d) Availability of Information Upon Request.--The plan shall 
provide that the administrator shall, upon written request of any 
participant or beneficiary, furnish a copy of the latest annual report, 
any terminal report, the bargaining agreement, trust agreement, 
contract, or other instruments under which the plan is established or 
operated. The administrator may make a reasonable charge to cover the 
cost of furnishing such complete copies. The Secretary may by 
regulation prescribe the maximum amount which will constitute a 
reasonable charge under the preceding sentence.

``SEC. 420B. REVIEW BY QUALIFIED REVIEW BOARDS OF CHANGES IN EMPLOYER 
              CONTRIBUTIONS.

    ``(a) In General.--The requirements of this section are met in 
connection with a public employee pension plan if, under the plan, 
changes in employer contributions are subject to review by a qualified 
review board established for the plan as provided in this section. For 
purposes of this section, the term `qualified review board' means a 
board--
            ``(1) whose membership is determined under the law of the 
        principal State in accordance with subsection (b), and
            ``(2) whose powers are determined under the law of the 
        principal State in accordance with subsection (c).
    ``(b) Membership.--
            ``(1) In general.--The membership of a qualified review 
        board established for a plan shall consist of 3 members 
        selected from among individuals who, by means of their 
        education and experience, have demonstrated expertise in the 
        area of pension fund management, as follows:
                    ``(A) one member is appointed by the Governor of 
                the State,
                    ``(B) one member is selected by the participants in 
                the plan, by means of an election held in such form and 
                manner as shall be prescribed in regulations of the 
                Secretary, and
                    ``(C) one member is selected jointly by the 
                Governor and by a representative of participants in the 
                plan (from a certified list of pension experts 
                established in accordance with paragraph (2)).
        Each member of the board shall have 1 vote. Members of the 
        board shall serve for such equivalent terms as shall be 
        prescribed under the law of the principal State.
            ``(2) Certified list of experts.--The Governor of the State 
        shall, for purposes of paragraph (1)(C), establish and maintain 
        with respect to each public employee pension plan (for which 
        such State is the principal State) a certified list of pension 
        experts meeting the requirements for membership on the 
        qualified review board. Individuals may be included on such 
        list only by agreement between the Governor of the State and a 
        representative elected by participants in the plan, entered 
        into by means of collective bargaining in such form and manner 
        as shall be prescribed in regulations of the Secretary.
    ``(c) Powers.--The board shall be treated as a qualified review 
board for purposes of this section with respect to any public employee 
pension plan (for which such State is the principal State) only if the 
powers of such board under the law of the principal State include 
review by the board, for approval or disapproval by the board, of any 
change in the terms of such plan, as a necessary prerequisite for such 
change to take effect, if--
            ``(1) such change would have the effect of changing levels 
        of employer contributions to the plan, and
            ``(2) such review is requested, in such form and manner as 
        shall be prescribed in regulations of the Secretary, by--
                    ``(A) at least one-third of the total number of 
                trustees of any trust fund forming a part of the plan, 
                or
                    ``(B) the head of any employee organization 
                representing at least 20 percent of the total number of 
                active participants in the plan.
The board may be treated as a qualified review board for purposes of 
this section only if, under the law of the principal State, any such 
change submitted to such review by the board may take effect only upon 
approval of the change by the board.

``SEC. 420C. EFFECT ON OTHER LAWS.

    ``(a) In General.--Nothing in this subpart shall be construed to 
alter, amend, modify, invalidate, impair, or supersede any law of a 
State or any rule or regulation issued under any such law, except to 
the extent that such law--
            ``(1) may now or hereafter relate to the subject matter of 
        the provisions of this subpart as they apply to any public 
        employee pension plan described in section 420D(b)(1) and not 
        exempt under section 420D(b)(2), and
            ``(2) prevents the application of such provisions.
    ``(b) State Causes of Action Preserved.--Nothing in this subpart 
shall be construed to apply with respect to State causes of action 
available in State courts.

``SEC. 420D. DEFINITIONS AND COVERAGE.

    ``(a) Definitions.--For purposes of this subpart--
            ``(1) Administrator.--The term `administrator' means--
                    ``(A) the board of trustees, retirement board, or 
                similar person with administrative responsibilities in 
                connection with a plan, or any other person 
                specifically so designated in connection with any 
                requirement of this subpart by the terms of the 
                instrument or instruments under which the plan is 
                operated, including but not limited to the law of any 
                State or of any political subdivision of any State, or
                    ``(B) in any case in which there is no person 
                described in subparagraph (A) in connection with the 
                plan, the plan sponsor.
            ``(2) Beneficiary.--The term `beneficiary' means a person 
        designated by a participant, or by the terms of a public 
        employee pension plan, who is or may become entitled to a 
        benefit thereunder.
            ``(3) Current liability.--The term `current liability' has 
        the meaning provided in section 302(d)(7) of the Employee 
        Retirement Income Security Act of 1974.
            ``(4) Employee.--The term `employee' means any individual 
        employed by an employer, employer representative, or other 
        person required to make employer contributions under the plan.
            ``(5) Employee organization.--The term `employee 
        organization' means any labor union or any organization of any 
        kind, or any agency or employee representation committee, 
        association, group, or plan, in which employees participate and 
        which exists for the purpose, in whole or in part, of dealing 
        with employers or employer representatives concerning a public 
        employee pension plan or other matters incidental to employment 
        relationships; or any employees' beneficiary association 
        organized for the purpose, in whole or in part, of establishing 
        such a plan.
            ``(6) Employer.--The term `employer' means--
                    ``(A) the government of any State or of any 
                political subdivision of a State,
                    ``(B) any agency or instrumentality of a government 
                referred to in subparagraph (A), or
                    ``(C) any agency or instrumentality of two or more 
                governments referred to in subparagraph (A).
            ``(7) Employer contribution.--The term `employer 
        contribution' means any contribution to a public employee 
        pension plan other than a contribution made by a participant in 
        the plan.
            ``(8) Employer representative.--The term `employer 
        representative' means--
                    ``(A) any group or association consisting, in whole 
                or in part, of employers acting, in connection with a 
                public employee pension plan, for an employer, or
                    ``(B) any person acting, in connection with a 
                public employee pension plan, indirectly in the 
                interest of an employer or of a group or association 
                described in subparagraph (A).
            ``(9) Public employee pension plan.--The terms `public 
        employee pension plan' and `plan' mean any plan, fund, or 
        program which was heretofore or is hereafter established or 
        maintained, in whole or in part, by an employer, an employer 
        representative, or an employee organization, or by a 
        combination thereof, to the extent that by its express terms or 
        as a result of surrounding circumstances such plan, fund, or 
        program--
                    ``(A) provides retirement income to employees, or
                    ``(B) results in a deferral of income by employees 
                for periods extending to the termination of covered 
                employment or beyond,
        regardless of the method of calculating the contributions made 
        to the plan, the method of calculating the benefits under the 
        plan, or the method of distributing benefits from the plan.
            ``(10) Principal state.--The term `principal State' means, 
        for any plan year with respect to a public employee pension 
        plan, the State in which, as of the beginning of such plan 
        year, the largest percentage of the participants of the plan 
        employed in any single State is employed.
            ``(11) Governor.--The term `Governor' means, in connection 
        with a public employee pension plan, the Governor (or 
        equivalent official) of the principal State.
            ``(12) Participant.--The term `participant' means any 
        individual who is or may become eligible to receive a benefit 
        of any type from a public employee pension plan or whose 
        beneficiaries may be eligible to receive any such benefit.
            ``(13) Person.--The term `person' means a State, a 
        political subdivision of a State, any agency or instrumentality 
        of a State or a political subdivision of a State, an 
        individual, a partnership, a joint venture, a corporation, a 
        mutual company, a joint-stock company, a trust, an estate, an 
        unincorporated organization, an association, or an employee 
        organization.
            ``(14) Plan sponsor.--The term `plan sponsor' means--
                    ``(A) in the case of a plan established or 
                maintained solely for employees of a single employer, 
                such employer,
                    ``(B) in the case of a plan established or 
                maintained by an employee organization, the employee 
                organization, or
                    ``(C) in the case of a plan established or 
                maintained by two or more employers or jointly by one 
or more employers and one or more employee organizations, the 
association, committee, board of trustees, or other similar group of 
representatives of the parties who establish or maintain the plan.
            ``(15) Plan year.--The term `plan year' means, with respect 
        to a plan, the calendar, policy, or fiscal year on which the 
        records of the plan are kept.
            ``(16) State.--The term `State' means any State of the 
        United States, the District of Columbia, the Commonwealth of 
        Puerto Rico, the Virgin Islands, American Samoa, and Guam.
    ``(b) Coverage.--
            ``(1) In general.--Except as provided in paragraph (2), 
        this subpart shall apply to any public employee pension plan.
            ``(2) Exceptions from coverage.--The provisions of this 
        subpart shall not apply to--
                    ``(A) any employee benefit plan described in 
                section 4(a) of the Employee Retirement Income Security 
                Act of 1974 (29 U.S.C. 1003(a)), which is not exempt 
                under section 4(b)(1) of such Act (29 U.S.C. 
                1003(b)(1));
                    ``(B) any plan which is unfunded and is maintained 
                by an employer or employer representative primarily for 
                the purpose of providing deferred compensation for a 
                select group of management or highly compensated 
                employees;
                    ``(C) any arrangement which would be a severance 
                pay arrangement, as defined in regulations of the 
                Secretary of Labor under section 3(2)(B)(i) of the 
                Employee Retirement Income Security Act of 1974 (29 
                U.S.C. 1002(2)(B)(i)), if the employer were an employer 
                within the meaning of section 3(5) of such Act (29 
                U.S.C. 1002(5));
                    ``(D) any agreement to the extent it is a coverage 
                agreement entered into pursuant to section 218 of the 
                Social Security Act (42 U.S.C. 418);
                    ``(E) any individual retirement account or any 
                individual retirement annuity within the meaning of 
                section 408, or a retirement bond within the meaning of 
                section 409;
                    ``(F) any plan described in section 401(d);
                    ``(G) any individual account plan consisting of an 
                annuity contract described in section 403(b);
                    ``(H) any eligible State deferred compensation 
                plan, as defined in section 457(b); or
                    ``(I) any plan maintained solely for the purpose of 
                complying with applicable workers' compensation laws or 
                disability insurance laws.''

SEC. 102. EFFECTIVE DATE OF TITLE.

    The amendments made by this title shall apply with respect to plan 
years beginning on or after January 1, 2001.

                     TITLE II--PENSION IMPROVEMENTS

SEC. 201. AUTOMATIC ENROLLMENT OF ALL EMPLOYEES IN 401(K) PLANS.

    (a) In General.--Subparagraph (A) of section 401(m) of the Internal 
Revenue Code of 1986 (relating to additional alternative method of 
satisfying nondiscrimination tests) is amended by striking ``and'' at 
the end of clause (ii), by striking the period at the end of clause 
(iii) and inserting ``, and'', and by inserting after clause (iii) the 
following new clause:
                            ``(iv) meets the requirements of 
                        subparagraph (C).''.
    (b) Minimum Coverage Requirements.--Paragraph (11) of section 
401(m) of such Code is amended by adding at the end the following new 
subparagraph:
                    ``(C) Minimum coverage requirements.--The 
                requirements of this subparagraph are met if--
                            ``(i) the plan meets the requirements of 
                        section 410(b), or
                            ``(ii) the plan is offered to all eligible 
                        employees.
                For purposes of clause (ii), a plan shall be treated as 
                offered to an eligible employee if the employee is 
                eligible to participate in the plan and if the employee 
                may elect to have employer contributions made on the 
                employee's behalf under the plan as elective employer 
                contributions to such plan on behalf of the employee or 
                to the employee directly in cash.''.

SEC. 202. IMPROVEMENTS IN SIMPLIFIED EMPLOYEE PENSIONS.

    (a) Participation Requirements.--Paragraph (2) of section 408(k) of 
the Internal Revenue Code of 1986 (relating to participation 
requirements) is amended--
            (1) in subparagraph (A), by adding ``and'' at the end; and
            (2) by striking subparagraphs (B) and (C) and inserting the 
        following:
                    ``(B) has completed at least 3 years of service (as 
                defined in section 411(a)(5)) for the employer.''.
    (b) Nondiscrimination Rules.--Subparagraph (C) of section 408(k)(3) 
of such Code (requiring contribution to bear uniform relationship to 
total compensation) is amended--
            (1) in the heading, by striking ``must bear uniform 
        relationship to total compensation'' and inserting ``must be 
        uniform''; and
            (2) by inserting after ``unless contributions thereto'' the 
        following: ``are uniform for all employees maintaining a 
        simplified employee pension or''.
    (c) Consent to Participation Not Required.--Paragraph (2) of 
section 408(k) of such Code (relating to participation requirements) is 
amended by adding at the end the following new sentence: ``An employer 
may establish and maintain a simplified employee pension for an 
employee without the employee's consent.''.
    (d) Raise in Limitation on Contributions.--Section 404(h)(1) of 
such Code (relating to special rules for simplified employee pensions) 
is amended by striking subparagraph (C) and inserting the following new 
subparagraphs:
                    ``(C) The amount deductible in a taxable year for a 
                simplified employee pension shall not exceed $30,000. 
                The excess of the amount contributed over the amount 
                deductible for a taxable year shall be deductible in 
                the succeeding taxable years in order of time, subject 
                to the limit of the preceding sentence.
                    ``(D) The Secretary shall adjust annually the 
                $30,000 amount in subparagraph (C) for increases in the 
                cost-of-living at the same time and in the same manner 
                as adjustments under section 415(d), except that the 
                base period shall be the calendar quarter ending 
                September 30, 2000, and any increase which is not a 
                multiple of $100 shall be rounded to the next lowest 
                multiple of $100.''.
    (e) Separate Treatment of Contributions to Simplified Employee 
Pensions.--
            (1) Determination of deductible contributions.--Subsection 
        (h) of section 404 of such Code is amended by striking 
        paragraphs (2) and (3) and inserting the following new 
        paragraph:
            ``(2) Limitation based on combination of plans 
        inapplicable.--Contributions to a simplified employee pension 
        shall not be taken into account for purposes of subsection 
        (a)(7).''.
            (2) Determination of limits on annual contributions under 
        nondiscrimination rules.--Paragraph (5) of section 415(e) of 
        such Code (relating to special rules for sections 403(b) and 
        408) is amended by striking the second sentence and inserting 
        the following new sentence: ``For purposes of this section, any 
        contribution by an employer to a simplified employee pension 
        shall not be taken into account.''.
    (f) Joint and Survivor Annuity Requirements.--Section 408(k) of 
such Code is amended--
            (1) by redesignating paragraph (9) as paragraph (10); and
            (2) by inserting after paragraph (8) the following new 
        paragraph:
            ``(9) Joint and survivor annuity requirements.--
        Requirements similar to the requirements of section 401(a)(11) 
        shall apply with respect to annuities purchased with amounts 
        distributed from simplified employee pensions.''.
    (g) Annual Reporting Requirmeents for Simplified Employee 
Pensions.--Paragraph (1) of section 408(l) of such Code (relating to 
simplified employer reports) is amended to read as follows:
            ``(1) In general.--The Secretary shall require by 
        regulations that an employer who makes a contribution on behalf 
        of an employee to a simplified employee pension shall provide 
        simplified annual reports. The reports required by this 
        subsection shall be filed in such manner, and information with 
        respect to such contributions shall be furnished to the 
        employee in such manner, as may be required by regulations, 
        except that such reports shall include information sufficient 
        to allow the employee to determine that the simplified employee 
        pension is in compliance with the requirements of this 
        section.''.

SEC. 203. PENSION INTEGRATION RULES.

    (a) Applicability of New Integration Rules Extended to All Existing 
Accrued Benefits.--Notwithstanding subsection (c)(1) of section 1111 of 
the Tax Reform Act of 1986 (relating to effective date of application 
of nondiscrimination rules to integrated plans) (100 Stat. 2440), 
effective for plan years beginning after the date of the enactment of 
this Act, the amendments made by subsection (a) of such section 1111 
shall also apply to benefits attributable to plan years beginning on or 
before December 31, 1988.
    (b) Integration Disallowed for Simplified Employee Pensions.--
            (1) In general.--Subparagraph (D) of section 408(k)(3) of 
        the Internal Revenue Code of 1986 (relating to permitted 
        disparity under rules limiting discrimination under simplified 
        employee pensions) is repealed.
            (2) Conforming amendment.--Subparagraph (C) of such section 
        408(k)(3) is amended by striking ``and except as provided in 
        subparagraph (D),''.
            (3) Effective date.--The amendments made by this subsection 
        shall apply with respect to taxable years beginning on or after 
        January 1, 1999.
    (c) Eventual Repeal of Integration Rules.--Effective for plan years 
beginning on or after January 1, 2002--
            (1) subparagraphs (C) and (D) of section 401(a)(5) of the 
        Internal Revenue Code of 1986 (relating to pension integration 
        exceptions under nondiscrimination requirements for 
        qualification) are repealed, and subparagraphs (E), (F), and 
        (G) of such section 401(a)(5) are redesignated as subparagraphs 
        (C), (D), and (E), respectively; and
            (2) subsection (l) of section 401 of such Code (relating to 
        nondiscriminatory coordination of defined contribution plans 
        with OASDI) is repealed.

SEC. 204. INCREASE TO AGE 75 FOR BEGINNING MANDATORY DISTRIBUTIONS.

    (a) Qualified Pension Plans.--Subparagraph (C) of section 401(a)(9) 
of the Internal Revenue Code of 1986 (relating to required 
distributions) is amended by striking ``age 70\1/2\'' each place it 
appears and inserting ``the applicable age''.
    (b) Applicable Age.--Subparagraph (C) of section 401(a)(9) of such 
Code is amended by adding at the end the following new clause:
                            ``(v) Applicable age.--
                                    ``(I) In general.--For purposes of 
                                this clause, the term applicable age 
                                shall be determined in accordance with 
                                the following table:

                                                             Applicable
``Calendar Year:                                                   Age:
    2001..........................................                  71 
    2002..........................................                  72 
    2003..........................................                  73 
    2004..........................................                  74 
    2005 and each calendar year thereafter........                  75.
                                    ``(II) Election to use age of 
                                spouse.--For purposes of this 
                                subparagraph, an employee who files a 
                                joint return for a taxable year may 
                                elect to substitute the age of the 
                                employee's spouse for his age.''.
    (c) Individual Retirement Accounts.--Paragraph (1) of section 
219(d) of such Code is amended--
            (1) by striking ``age 70\1/2\'' in the text and inserting 
        ``the applicable age (as defined in section 401(a)(9)(C)(v))'', 
        and
            (2) by striking ``age 70\1/2\'' in the heading and 
        inserting ``the applicable age''.
    (d) Roth IRA's.--Paragraph (4) of section 408A(c) of such Code is 
amended--
            (1) by striking ``age 70\1/2\'' in the text and inserting 
        ``the applicable age (as defined in section 401(a)(9)(C)(v))'', 
        and
            (2) by striking ``age 70\1/2\'' in the heading and 
        inserting ``the applicable age''.

SEC. 205. TREATMENT OF MULTIEMPLOYER PLANS UNDER SECTION 415.

    (a) Compensation Limit.--Paragraph (11) of section 415(b) of the 
Internal Revenue Code of 1986 (relating to limitation for defined 
benefit plans) is amended to read as follows:
            ``(11) Special limitation rule for governmental and 
        multiemployer plans.--In the case of a governmental plan (as 
        defined in section 414(d)) or a multiemployer plan (as defined 
        in section 414(f)), subparagraph (B) of paragraph (1) shall not 
        apply.''.
    (b) Combining and Aggregation of Plans.--
            (1) Combining of plans.--Subsection (f) of section 415 of 
        such Code (relating to combining of plans) is amended by adding 
        at the end the following:
            ``(3) Exception for multiemployer plans.--Notwithstanding 
        paragraph (1) and subsection (g), a multiemployer plan (as 
        defined in section 414(f)) shall not be combined or aggregated 
        with any other plan maintained by an employer for purposes of 
        applying the limitations established in this section, except 
        that such plan shall be combined or aggregated with another 
        plan which is not such a multiemployer plan solely for purposes 
        of determining whether such other plan meets the requirements 
        of subsections (b)(1)(A) and (c).''.
            (2) Conforming amendment for aggregation of plans.--
        Subsection (g) of section 415 of such Code (relating to 
        aggregation of plans) is amended by striking ``The Secretary'' 
        and inserting ``Except as provided in subsection (f)(3), the 
        Secretary''.

SEC. 206. RESTRICTIONS ON EXCLUSION OF UNIONIZED EMPLOYEES FROM 
              PARTICIPATION IN 401(K) PLANS.

    Paragraph (4) of section 401(k) of the Internal Revenue Code of 
1986 (relating to other requirements) is amended by adding at the end 
the following new subparagraph:
                    ``(D) Benefits subject of bargaining.--A cash or 
                deferred arrangement of any employer shall not be 
                treated as a qualified cash or deferred arrangement if 
                any employee of such employer who is described in 
                section 410(b)(3)(A) and who is not eligible to benefit 
                under the arrangement is not otherwise covered under an 
                employee pension benefit plan (as defined in section 
                3(2)(A) of the Employee Retirement Income Security Act 
                of 1974) which is maintained for employees of such 
                employer pursuant to an agreement which the Secretary 
                of Labor finds to be a collective bargaining agreement 
                between employee representatives and one or more 
                employers and which is qualified under section 
                401(a).''.

SEC. 207. REPEAL OF COORDINATION REQUIREMENTS FOR DEFERRED COMPENSATION 
              PLANS OF STATE AND LOCAL GOVERNMENTS AND TAX-EXEMPT 
              ORGANIZATIONS.

    (a) In General.--Subsection (c) of section 457 of the Internal 
Revenue Code of 1986 (relating to deferred compensation plans of State 
and local governments and tax-exempt organizations) is amended to read 
as follows:
    ``(c) Limitation.--The maximum amount of the compensation of any 
one individual which may be deferred under subsection (a) during any 
taxable year shall not exceed the amount in effect under subsection 
(b)(2)(A) (as modified by any adjustment provided under subsection 
(b)(3)).''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to years beginning after December 31, 2000.

SEC. 208. CLARIFICATION OF TAX TREATMENT OF DIVISION OF SECTION 457 
              PLAN BENEFITS UPON DIVORCE.

    (a) In General.--Section 414(p)(11) of the Internal Revenue Code of 
1986 (relating to application of rules to governmental and church 
plans) is amended--
            (1) by inserting ``or an eligible deferred compensation 
        plan (within the meaning of section 457(b))'' after 
        ``subsection (e))'', and
            (2) in the heading, by striking ``governmental and church 
        plans'' and inserting ``certain other plans''.
    (b) Waiver of Certain Distribution Requirements.--Paragraph (10) of 
section 414(p) of such Code is amended by striking ``and section 
409(d)'' and inserting ``section 409(d), and section 457(d)''.
    (c) Tax Treatment of Payments From a Section 457 Plan.--Subsection 
(p) of section 414 of such Code is amended by redesignating paragraph 
(12) as paragraph (13) and inserting after paragraph (11) the following 
new paragraph:
            ``(12) Tax treatment of payments from a section 457 plan.--
        If a distribution or payment from an eligible deferred 
        compensation plan described in section 457(b) is made pursuant 
        to a qualified domestic relations order, rules similar to the 
        rules of section 402(e)(1)(A) shall apply to such distribution 
        or payment.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to transfers, distributions, and payments made after December 31, 
2000.

SEC. 209. ROLLOVERS ALLOWED AMONG VARIOUS TYPES OF PLANS.

    (a) Rollovers From and to Section 457 Plans.--
            (1) Rollovers from section 457 plans.--
                    (A) In general.--Section 457(e) of the Internal 
                Revenue Code of 1986 (relating to other definitions and 
                special rules) is amended by adding at the end the 
                following:
            ``(16) Rollover amounts.--
                    ``(A) General rule.--In the case of an eligible 
                deferred compensation plan established and maintained 
                by an employer described in subsection (e)(1)(A), if--
                            ``(i) any portion of the balance to the 
                        credit of an employee in such plan is paid to 
                        such employee in an eligible rollover 
                        distribution (within the meaning of section 
                        402(c)(4) without regard to subparagraph (C) 
                        thereof),
                            ``(ii) the employee transfers any portion 
                        of the property such employee receives in such 
                        distribution to an eligible retirement plan 
                        described in section 402(c)(8)(B), and
                            ``(iii) in the case of a distribution of 
                        property other than money, the amount so 
                        transferred consists of the property 
                        distributed,
                then such distribution (to the extent so transferred) 
                shall not be includible in gross income for the taxable 
                year in which paid.
                    ``(B) Certain rules made applicable.--The rules of 
                paragraphs (2) through (7) (other than paragraph 
                (4)(C)) and (9) of section 402(c) and section 402(f) 
                shall apply for purposes of subparagraph (A).
                    ``(C) Reporting.--Rollovers under this paragraph 
                shall be reported to the Secretary in the same manner 
                as rollovers from qualified retirement plans (as 
                defined in section 4974(c)).''.
                    (B) Deferral limit determined without regard to 
                rollover amounts.--Section 457(b)(2) of such Code 
                (defining eligible deferred compensation plan) is 
                amended by inserting ``(other than rollover amounts)'' 
                after ``taxable year''.
                    (C) Direct rollover.--Paragraph (1) of section 
                457(d) of such Code is amended by striking ``and'' at 
                the end of subparagraph (A), by striking the period at 
                the end of subparagraph (B) and inserting ``, and'', 
                and by inserting after subparagraph (B) the following:
                    ``(C) in the case of a plan maintained by an 
                employer described in subsection (e)(1)(A), the plan 
                meets requirements similar to the requirements of 
                section 401(a)(31).
        Any amount transferred in a direct trustee-to-trustee transfer 
        in accordance with section 401(a)(31) shall not be includible 
        in gross income for the taxable year of transfer.''.
                    (D) Withholding.--
                            (i) Paragraph (12) of section 3401(a) of 
                        such Code is amended by adding at the end the 
                        following:
                    ``(E) under or to an eligible deferred compensation 
                plan which, at the time of such payment, is a plan 
                described in section 457(b) maintained by an employer 
                described in section 457(e)(1)(A); or''.
                            (ii) Paragraph (3) of section 3405(c) of 
                        such Code is amended to read as follows:
            ``(3) Eligible rollover distribution.--For purposes of this 
        subsection, the term `eligible rollover distribution' has the 
        meaning given such term by section 402(f)(2)(A).''.
                            (iii) Liability for withholding.--
                        Subparagraph (B) of section 3405(d)(2) of such 
                        Code is amended by striking ``or'' at the end 
                        of clause (ii), by striking the period at the 
                        end of clause (iii) and inserting ``, or'', and 
                        by adding at the end the following:
                            ``(iv) section 457(b).''.
            (2) Rollovers to section 457 plans.--
                    (A) In general.--Section 402(c)(8)(B) of such Code 
                (defining eligible retirement plan) is amended by 
                striking ``and'' at the end of clause (iii), by 
                striking the period at the end of clause (iv) and 
                inserting ``, and'', and by inserting after clause (iv) 
                the following new clause:
                            ``(v) an eligible deferred compensation 
                        plan described in section 457(b) of an employer 
                        described in section 457(e)(1)(A).''.
                    (B) Separate accounting.--Section 402(c) of such 
                Code is amended by adding at the end the following new 
                paragraph:
            ``(11) Separate accounting.--Unless a plan described in 
        clause (v) of paragraph (8)(B) agrees to separately account for 
        amounts rolled into such plan from eligible retirement plans 
        not described in such clause, the plan described in such clause 
        may not accept transfers or rollovers from such retirement 
        plans.''.
                    (C) 10 percent additional tax.--Subsection (t) of 
                section 72 of such Code (relating to 10-percent 
                additional tax on early distributions from qualified 
                retirement plans) is amended by adding at the end the 
                following new paragraph:
            ``(11) Special rule for rollovers to section 457 plans.--
        For purposes of this subsection, a distribution from an 
        eligible deferred compensation plan (as defined in section 
        457(b)) of an employer described in section 457(e)(1)(A) shall 
        be treated as a distribution from a qualified retirement plan 
        described in section 4974(c)(1) to the extent that such 
        distribution is attributable to an amount transferred to an 
        eligible deferred compensation plan from a qualified retirement 
        plan (as defined in section 4974(c)).''.
    (b) Allowance of Rollovers From and to 403(b) Plans.--
            (1) Rollovers from section 403(b) plans.--Section 
        403(b)(8)(A)(ii) of such Code (relating to rollover amounts) is 
        amended by striking ``such distribution'' and all that follows 
        and inserting ``such distribution to an eligible retirement 
        plan described in section 402(c)(8)(B), and''.
            (2) Rollovers to section 403(b) plans.--Section 
        402(c)(8)(B) of such Code (defining eligible retirement plan), 
        as amended by subsection (a), is amended by striking ``and'' at 
        the end of clause (iv), by striking the period at the end of 
        clause (v) and inserting ``, and'', and by inserting after 
        clause (v) the following new clause:
                            ``(vi) an annuity contract described in 
                        section 403(b).''.
    (c) Expanded Explanation to Recipients of Rollover Distributions.--
Paragraph (1) of section 402(f) of such Code (relating to written 
explanation to recipients of distributions eligible for rollover 
treatment) is amended by striking ``and'' at the end of subparagraph 
(C), by striking the period at the end of subparagraph (D) and 
inserting ``, and'', and by adding at the end the following new 
subparagraph:
                    ``(E) of the provisions under which distributions 
                from the eligible retirement plan receiving the 
                distribution may be subject to restrictions and tax 
                consequences which are different from those applicable 
                to distributions from the plan making such 
                distribution.''.
    (d) Spousal Rollovers.--Section 402(c)(9) of such Code (relating to 
rollover where spouse receives distribution after death of employee) is 
amended by striking ``; except that'' and all that follows up to the 
end period.
    (e) Conforming Amendments.--
            (1) Section 72(o)(4) of such Code is amended by striking 
        ``and 408(d)(3)'' and inserting ``403(b)(8), 408(d)(3), and 
        457(e)(16)''.
            (2) Section 219(d)(2) of such Code is amended by striking 
        ``or 408(d)(3)'' and inserting ``408(d)(3), or 457(e)(16)''.
            (3) Section 401(a)(31)(B) of such Code is amended by 
        striking ``and 403(a)(4)'' and inserting ``, 403(a)(4), 
        403(b)(8), and 457(e)(16)''.
            (4) Subparagraph (A) of section 402(f)(2) of such Code is 
        amended by striking ``or paragraph (4) of section 403(a)'' and 
        inserting ``, paragraph (4) of section 403(a), subparagraph (A) 
        of section 403(b)(8), or subparagraph (A) of section 
        457(e)(16)''.
            (5) Paragraph (1) of section 402(f) of such Code is amended 
        by striking ``from an eligible retirement plan''.
            (6) Subparagraphs (A) and (B) of section 402(f)(1) of such 
        Code are each amended by striking ``another eligible retirement 
        plan'' and inserting ``an eligible retirement plan''.
            (7) Subparagraph (B) of section 403(b)(8) of such Code is 
        amended to read as follows:
                    ``(B) Certain rules made applicable.--The rules of 
                paragraphs (2) through (7) and (9) of section 402(c) 
                and section 402(f) shall apply for purposes of 
                subparagraph (A), except that section 402(f) shall be 
                applied to the payer in lieu of the plan 
                administrator.''.
            (8) Section 408(a)(1) of such Code is amended by striking 
        ``or 403(b)(8),'' and inserting ``403(b)(8), or 457(e)(16)''.
            (9) Subparagraphs (A) and (B) of section 415(b)(2) of such 
        Code are each amended by striking ``and 408(d)(3)'' and 
        inserting ``403(b)(8), 408(d)(3), and 457(e)(16)''.
            (10) Section 415(c)(2) of such Code is amended by striking 
        ``and 408(d)(3)'' and inserting ``408(d)(3), and 457(e)(16)''.
            (11) Section 4973(b)(1)(A) of such Code is amended by 
        striking ``or 408(d)(3)'' and inserting ``408(d)(3), or 
        457(e)(16)''.
    (f) Effective Date; Special Rule.--
            (1) Effective date.--The amendments made by this section 
        shall apply to distributions after December 31, 2000.
            (2) Special rule.--Notwithstanding any other provision of 
        law, subsections (h)(3) and (h)(5) of section 1122 of the Tax 
        Reform Act of 1986 shall not apply to any distribution from an 
        eligible retirement plan (as defined in clause (iii) or (iv) of 
        section 402(c)(8)(B) of the Internal Revenue Code of 1986) on 
        behalf of an individual if there was a rollover to such plan on 
        behalf of such individual which is permitted solely by reason 
        of any amendment made by this section.

SEC. 210. PURCHASE OF SERVICE CREDIT IN GOVERNMENTAL DEFINED BENEFIT 
              PLANS.

    (a) 403(b) Plans.--Subsection (b) of section 403 of the Internal 
Revenue Code of 1986 is amended by adding at the end the following new 
paragraph:
            ``(13) Trustee-to-trustee transfers to purchase permissive 
        service credit.--No amount shall be includible in gross income 
        by reason of a direct trustee-to-trustee transfer to a defined 
        benefit governmental plan (as defined in section 414(d)) if 
        such transfer is--
                    ``(A) for the purchase of permissive service credit 
                (as defined in section 415(n)(3)(A)) under such plan, 
                or
                    ``(B) a repayment to which section 415 does not 
                apply by reason of subsection (k)(3) thereof.''.
    (b) 457 Plans.--
            (1) Subsection (e) of section 457 of such Code is amended 
        by adding after paragraph (16) the following new paragraph:
            ``(17) Trustee-to-trustee transfers to purchase permissive 
        service credit.--No amount shall be includible in gross income 
        by reason of a direct trustee-to-trustee transfer to a defined 
        benefit governmental plan (as defined in section 414(d)) if 
        such transfer is--
                    ``(A) for the purchase of permissive service credit 
                (as defined in section 415(n)(3)(A)) under such plan, 
                or
                    ``(B) a repayment to which section 415 does not 
                apply by reason of subsection (k)(3) thereof.''.
            (2) Section 457(b)(2) is amended by striking ``(other than 
        rollover amounts)'' and inserting ``(other than rollover 
        amounts and amounts received in a transfer referred to in 
        subsection (e)(17))''.
    (c) Effective Date.--The amendments made by this section shall 
apply to trustee-to-trustee transfers after December 31, 2000.

                    TITLE III--ADDITIONAL AMENDMENTS

SEC. 301. INVOLUNTARY CASH-OUTS FROM SECTION 457 PLANS PERMITTED ONLY 
              IF DISTRIBUTION ROLLED TO A QUALIFIED PLAN.

    (a)  In General.--Section 457(e)(9) of the Internal Revenue Code of 
1986 is amended--
            (1) by striking clause (i) and inserting the following:
                            ``(i) in any case in which such amount 
                        exceeds $500, such amount (to the extent the 
                        distribution of such amount is otherwise 
                        includible in gross income) is distributed in a 
                        trustee-to-trustee transfer to a qualified plan 
                        of such individual which is specified by such 
                        individual.''; and
            (2) by adding at the end the following new subparagraph:
                    ``(C) Qualified plan.--For purposes of subparagraph 
                (A), the term `qualified plan' means a plan, contract, 
                pension, or trust described in subparagraph (A) or (B) 
                of section 219(g)(5).''.
    (b) Exception From Income Tax Withholding.--Paragraph (2) of 
section 3405(c) of such Code is amended by inserting before the period 
``or if the distribution is a trustee-to-trustee transfer described in 
section 203(e) or 205(g) of the Employee Retirement Income Security Act 
of 1974 or section 457(e)(9) of this title''.

SEC. 302. STATUTORY EXEMPTION FROM PROHIBITED TRANSACTION RULES FOR 
              EMERGENT TRANSACTIONS.

    (a) In General.--Section 4975 of the Internal Revenue Code of 1986 
(relating to tax on prohibited transactions) is amended--
            (1) by redesignating subsections (h) and (i) as subsections 
        (i) and (j), respectively; and
            (2) by inserting after subsection (g) the following new 
        subsection:
    ``(h) Statutory Exemption From Prohibited Transaction Rules for 
Emergent Transactions.--
            ``(1) In general.--Pursuant to regulations issued by the 
        Secretary of Labor, a transaction between a plan and an 
        eligible person constituting the purchase or sale of a 
        financial product which is in violation of a restriction 
        imposed by subsection (c)(1) may be exempted under section 
        408(a) of the Employee Retirement Income Security Act of 1974 
        from treatment as a violation of such restriction if--
                    ``(A) prior to engaging in the transaction, the 
                plan acquires from the eligible person a qualifying 
                guarantee, consisting of a letter of credit or other 
                form of written guarantee, issued by a bank or similar 
                financial institution (other than the eligible person 
                requesting the exemption or an affiliate) regulated and 
                supervised by, and subject to periodic examination by, 
                an agency of a State or of the Federal Government, in a 
                stated amount equal, as of the close of business on the 
                day preceding the transaction, to not less than 100 
                percent of the amount of plan assets involved in the 
                transaction, plus interest on that amount at a rate 
                determined by the parties to the transaction, or in the 
                absence of such determination, an interest rate equal 
                to the underpayment rate defined in section 6621(a)(2);
                    ``(B) the eligible person receives in such 
                transaction not more than reasonable compensation;
                    ``(C) such transaction is expressly approved by an 
                independent fiduciary who has investment authority with 
                respect to the plan assets involved in the transaction;
                    ``(D) within 60 days after the transaction, the 
                eligible person submits to the Secretary an application 
                for an exemption under subsection (a) from such 
                restriction;
                    ``(E) immediately after the acquisition of the 
                financial product--
                            ``(i) the fair market value of such 
                        financial product does not exceed 1 percent of 
                        the fair market value of the assets of the 
                        plan, and
                            ``(ii) the aggregate fair market value of 
                        all outstanding financial products acquired by 
                        the plan from the eligible person pursuant to 
this subsection does not exceed 5 percent of the fair market value of 
the assets of the plan;
                    ``(F) the Secretary determines not to grant the 
                exemption; and
                    ``(G) the transaction is reversed within 60 days 
                after the date of the Secretary's determination.
            ``(2) For purposes of this subsection--
                    ``(A) a guarantee referred to in paragraph (1) is 
                `qualifying' if such guarantee is irrevocable and, 
                under the terms of the guarantee--
                            ``(i) if the Secretary grants the 
                        exemption, the guarantee may expire without any 
                        payments made to the plan, and
                            ``(ii) if the Secretary determines not to 
                        grant the exemption, the plan has the 
                        unconditional right to apply the amounts under 
                        the guarantee to any losses suffered and to the 
                        payment of interest determined under paragraph 
                        (1); and
                    ``(B) the term `eligible person' means a person 
                that--
                            ``(i) consists of--
                                    ``(I) a bank as defined in section 
                                202(a)(2) of the Investment Advisers 
                                Act of 1940,
                                    ``(II) an investment adviser 
                                registered under the Investment 
                                Advisers Act of 1940,
                                    ``(III) an insurance company which 
                                is qualified to do business in more 
                                than one State, or
                                    ``(IV) a broker-dealer registered 
                                under the Securities Exchange Act of 
                                1934,
                            ``(ii) has shareholders' or partners' 
                        equity in excess of $1,000,000, and
                            ``(iii) is not described in section 411 of 
                        the Employee Retirement Income Security Act of 
                        1974.''.
    (b) Effective Date.--The amendments made by this section shall 
apply with respect to transactions occurring after December 31, 2000.

SEC. 303. LOANS FROM RETIREMENT PLANS FOR HEALTH INSURANCE AND JOB 
              TRAINING EXPENSES.

    (a) Qualification Requirement for Pension Plans.--Paragraph (13) of 
section 401(a) of the Internal Revenue Code of 1986 (relating to 
assignment and alienation) is amended by adding at the end the 
following new subparagraph:
                    ``(E) Loans from retirement plans for health 
                insurance and job training expenses.--Notwithstanding 
                subparagraph (A), a trust shall not constitute a 
                qualified trust under this section unless the plan of 
                which such trust is a part provides that a participant 
                or beneficiary who is involuntarily separated from 
                employment may, on the date of such separation, obtain 
                a loan from the plan the proceeds of which are to be 
                used within 6 months after the date of such loan--
                            ``(i) for payments for insurance which 
                        constitutes medical care for the taxpayer and 
                        the taxpayer's spouse and dependents, or
                            ``(ii) for job training expenses.
                For purposes of the preceding sentence, the 
                requirements of clauses subparagraphs (B)(iv), (v), and 
                (vi), (C), (D), and (E) of section 408(e)(7) shall 
                apply, and in the case of a plan that is a defined 
                benefit plan, section 408(e)(7)(C) shall be applied by 
                substituting `accruals (other than contributions)' for 
                `interests and dividends'.''.
    (b) Prohibited Transaction Exemption.--Section 4975(d) of such Code 
(relating to exemptions from tax on prohibited transactions) is amended 
by striking ``or'' at the end of paragraph (14), by striking the period 
at the end of paragraph (15) and inserting ``; or'', and by inserting 
after paragraph (15) the following new paragraph:
            ``(16) any loan--
                    ``(A) from an individual retirement plan for the 
                payment of health insurance premiums or job training 
                expenses that is a qualified loan (as defined in 
                section 408(e)(7)(B)), or
                    ``(B) made by the plan to a disqualified person who 
                is a participant or beneficiary of the plan if such 
                loan--
                            ``(i) is for the payment of health 
                        insurance premiums or job training expenses, 
                        and
                            ``(ii) meets the requirements of section 
                        401(a)(13)(E).''.
    (c) Effective Date.--The amendments made by this section shall 
apply to loans made after the effective date specified in section 401.

SEC. 304. MISSING PARTICIPANTS.

    (a) In General.--Section 401(a)(34) of the Internal Revenue Code of 
1986 (relating to benefits of missing participants on plan termination) 
is amended by striking ``title IV'' and inserting ``section 4050''.
    (b) Effective Date.--The amendment made by this section shall apply 
to distributions made after 1 year after the date of the enactment of 
this Act.

SEC. 305. INCOME AVERAGING OF CORRECTED CIVIL SERVICE ANNUITY BENEFIT 
              PAYMENTS.

    (a) In General.--Part I of subchapter Q of chapter 1 of the 
Internal Revenue Code of 1986 (relating to income averaging) is amended 
by inserting after section 1301 the following new section:

``SEC. 1302. AVERAGING OF CORRECTED CIVIL SERVICE ANNUITY BENEFIT 
              PAYMENTS.

    ``(a) In General.--Unless the taxpayer elects not to have this 
section apply for a taxable year, any corrected civil service annuity 
benefit payment includable in gross income for such taxable year 
(without regard to this section) shall be so included ratably over the 
5-taxable year period beginning with such taxable year.
    ``(b) Corrected Civil Service Annuity Benefit Payment.--For 
purposes of subsection (a), the term `corrected civil service annuity 
benefit payment' means with respect to an individual the sum of--
            ``(1) the lump sum payment awarded by reason of a court 
        order, or decision of the Merit Systems Protection Board, under 
        which the individual is entitled to receive an amount equal to 
        all or any part of an annuity not paid to the individual as a 
        result of an erroneous application or interpretation of 
        subchapter III of chapter 83 or chapter 84 of title 5, United 
        States Code, or any other provision of law (or any rule or 
        regulation relating thereto), plus
            ``(2) interest on the amount described in paragraph (1) 
        awarded under section 7704 of title 5, United States Code.
    ``(c) Annuity.--For purposes of subsection (b), the term `annuity' 
has the meaning given to such term by section 7704(c) of title 5, 
United States Code.
    ``(d) Finality of Election.--An election under subsection (a) with 
respect to a corrected civil service annuity benefit payment for a 
taxable year may not be changed after the due date of the return for 
such taxable year.''.
    (b) Clerical Amendment.--The table of sections for part I of 
subchapter Q of chapter 1 of such Code is amended by inserting after 
the item relating to section 1301 the following new item:

                              ``Sec. 1302. Averaging of corrected civil 
                                        service annuity benefit 
                                        payments.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to payments received after December 31, 2000.

                      TITLE IV--GENERAL PROVISIONS

SEC. 401. GENERAL EFFECTIVE DATE.

    (a) In General.--Except as otherwise provided in this Act, and 
subject to subsection (b), the amendments made by this Act shall apply 
with respect to plan years beginning on or after January 1, 2001.
    (b) Special Rule for Collectively Bargained Plans.--In the case of 
a plan maintained pursuant to 1 or more collective bargaining 
agreements between employee representatives and 1 or more employers 
ratified on or before the date of the enactment of this Act, subsection 
(a) shall be applied to benefits pursuant to, and individuals covered 
by, any such agreement by substituting for ``January 1, 2001'' the date 
of the commencement of the first plan year beginning on or after the 
earlier of--
            (1) the later of--
                    (A) January 1, 2002, or
                    (B) the date on which the last of such collective 
                bargaining agreements terminates (determined without 
                regard to any extension thereof after the date of the 
                enactment of this Act), or
            (2) January 1, 2003.

SEC. 402. PLAN AMENDMENTS.

    If any amendment made by this Act requires an amendment to any 
plan, such plan amendment shall not be required to be made before the 
first plan year beginning on or after January 1, 2003, if--
            (1) during the period after such amendment made by this Act 
        takes effect and before such first plan year, the plan is 
        operated in accordance with the requirements of such amendment 
        made by this Act, and
            (2) such plan amendment applies retroactively to the period 
        after such amendment made by this Act takes effect and such 
        first plan year.
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