I

104TH CONGRESS

1ST SESSION H. R. 2365

To amend the Internal Revenue Code of 1986 to allow deductible contributions to individual retirement plans designated as Retirement Years Savings Accounts.

IN THE HOUSE OF REPRESENTATIVES

SEPTEMBER 19, 1995

Mr. TALENT 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 allow deductible contributions to individual retirement plans designated as Retirement Years Savings Accounts.

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

3 SECTION 1. RETIREMENT YEARS SAVINGS ACCOUNTS.

4 (a) IN GENERAL.—Subpart A of part I of subchapter

5 D of chapter 1 of the Internal Revenue Code of 1986 (re6 lating to pension, profit-sharing, stock bonus plans, etc.)

7 is amended by inserting after section 408 the following

8 new section:
2

•HR 2365 IH

1 ‘‘SEC. 408A. RETIREMENT YEARS SAVINGS ACCOUNTS.

2 ‘‘(a) GENERAL RULE.—Except as provided in this

3 section, a Retirement Years Savings Account shall be

4 treated for purposes of this title in the same manner as

5 an individual retirement plan.

6 ‘‘(b) RETIREMENT YEARS SAVINGS ACCOUNT.—For

7 purposes of this title, the term ‘Retirement Years Savings

8 Account’ or ‘RYS Account’ means an individual retire9 ment plan which is designated at the time of the establish10 ment of the plan as a Retirement Years Savings Account.

11 Such designation shall be made in such manner as the

12 Secretary may prescribe.

13 ‘‘(c) CONTRIBUTION RULES.—

14 ‘‘(1) DEDUCTION ALLOWED FOR YEARS BEFORE

15 INDIVIDUAL ATTAINS AGE 40.—Section 219(g) shall

16 not apply to any contribution to an RYS Account for

17 any taxable year before the taxable year during

18 which the individual attains age 40.

19 ‘‘(2) DENIAL OF DEDUCTION FOR YEARS AFTER

20 INDIVIDUAL ATTAINS AGE 40.—No deduction shall

21 be allowed under section 219 for a contribution to

22 an RYS account for the taxable year in which the

23 individual attains age 40 or any taxable year there24 after.

25 ‘‘(3) INCREASED SPOUSAL CONTRIBUTION.—
3

•HR 2365 IH

1 ‘‘(A) IN GENERAL.—In the case of an indi2 vidual to whom this paragraph applies for the

3 taxable year, in lieu of applying section 219(c),

4 the limitation under section 219(b)(1)(B) shall

5 be equal to the sum of—

6 ‘‘(i) the compensation includible in

7 such individual’s gross income for the tax8 able year, plus

9 ‘‘(ii) the compensation includible in

10 the gross income of such individual’s

11 spouse for the taxable year reduced by the

12 amount of the limitation under section

13 219(b)(1) applicable to such spouse for

14 such taxable year.

15 ‘‘(B) INDIVIDUALS TO WHOM PARAGRAPH

16 APPLIES.—This paragraph shall apply to any

17 individual if—

18 ‘‘(i) such individual files a joint return

19 for the taxable year, and

20 ‘‘(ii) the amount of compensation (if

21 any) includible in such individual’s gross

22 income for the taxable year is less than the

23 compensation includible in the gross in24 come of such individual’s spouse for the

25 taxable year.
4

•HR 2365 IH

1 ‘‘(4) TAX ON EXCESS CONTRIBUTIONS.—Sec2 tion 4973 shall be applied separately with respect to

3 individual retirement plans which are RYS Accounts

4 and individual retirement plans which are not RYS

5 Accounts; except that, for purposes of applying such

6 section with respect to individual retirement plans

7 which are RYS Accounts, the limitation under para8 graph (3) shall be taken into account.

9 ‘‘(5) LIMITATIONS ON ROLLOVER CONTRIBU10 TIONS.—No rollover contribution may be made to an

11 RYS Account unless—

12 ‘‘(A) such contribution is from another

13 RYS Account, or

14 ‘‘(B) such contribution is from an individ15 ual retirement plan (other than an RYS Ac16 count) and is made before January 1, 1998.

17 ‘‘(d) DISTRIBUTION RULES.—For purposes of this

18 title—

19 ‘‘(1) EXCLUSION FROM GROSS INCOME; NO

20 PENALTY TAX.—No portion of a qualified distribu21 tion from an RYS Account shall be includible in

22 gross income.

23 ‘‘(2) QUALIFIED DISTRIBUTION.—For purposes

24 of this subsection, the term ‘qualified distribution’

25 means any payment or distribution—
5

•HR 2365 IH

1 ‘‘(A) made on or after the date on which

the individual attains age 591 2 ⁄2,

3 ‘‘(B) made to a beneficiary (or to the es4 tate of the individual) on or after the death of

5 the individual, or

6 ‘‘(C) attributable to the individual’s being

7 disabled (within the meaning of section

8 72(m)(7)).

9 ‘‘(e) OTHER DEFINITIONS.—For purposes of this

10 section—

11 ‘‘(1) ROLLOVER CONTRIBUTIONS.—The term

12 ‘rollover contributions’ means contributions de13 scribed in sections 402(c), 403(a)(4), 403(b)(8), or

14 408(d)(3).

15 ‘‘(2) COMPENSATION.—The term ‘compensa16 tion’ has the meaning given such term by section

17 219(f).’’

18 (b) CLERICAL AMENDMENT.—The table of sections

19 for subpart A of part I of subchapter D of chapter 1 of

20 such Code is amended by inserting after the item relating

21 to section 408 the following new item:

‘‘Sec. 408A. Retirement Years Savings Accounts.’’

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

23 this section shall apply to taxable years beginning after

24 December 31, 1995.

Æ